Sarbanes-Oxley compliance for software distributor

The business challenge

A leading distributor of software and media sought to replace its co-sourced internal audit and SOX compliance partner. The Company did not feel they were receiving optimal value or service for the fees charged by the prior co-sourced partner. In addition, the Company felt that it had significant opportunity to streamline its current control environment, based upon a top-down, risk-based approach.

Improving controls

Baker Tilly worked closely with the Company’s compliance manager to understand the Company’s financial reporting and business requirements. Baker Tilly reviewed the Company’s current process and control documentation, then recommended changes that would result in a more efficient and effective control environment.

The following activities were completed during the project:

  • Reviewed process narratives:
    • Workshops were held with individuals from each of the key financial processes to understand the procedures and controls being performed.
  • Analyzed the control environment using a top-down, risk-based approach:
    • For each key process, the risks and associated controls were analyzed to determine if any control gaps existed within the current procedures.
    • The current population of key controls was examined to identify areas where testing could be streamlined or reduced as promulgated by the SEC and the PCAOB under AS 5. As a result, the amount of testing performed was reduced by roughly 18 percent.
  • Assisted with control testing:
    • Baker Tilly partnered with the current internal audit resources to complete testing of key controls.
    • Baker Tilly assisted management in identifying proper remediation efforts in order to remediate any control deficiencies identified.

Business results

As a result of Baker Tilly’s services, the Company:

  • Appropriately maintained its compliance with the requirements of the Sarbanes-Oxley Act of 2002
  • Implemented a more efficient and effective SOX Compliance solution that better fit its needs, and reduced its overall SOX Compliance costs.