SOX Certifications- 10 Tips for Good Housekeeping


SOX certifications continue to become more rather than less important to companies and the executives who sign them. If a material weakness must be disclosed, the company maybe required to engage in budget-busting corrective measures. Executives and the companies they serve face potential financial, regulatory and litigation exposure resulting from “signing on the dotted line.” Finally, SOX certification procedures and controls have become a critical part of standard due diligence measures. For example, companies are commonly asked to represent and warrant satisfaction of SOX requirements in a securities offering, lending arrangement or a business combination.

How then does a company ensure that its SOX certification procedures are fresh, well documented and consistently followed?

Here are 10 tips to facilitate a vigorous and effective SOX certification process. These considerations should be tailored to a company’s particular facts and circumstances; there is no “one size fits all” process for SOX certifications.

1. Don’t rush the process.

Taking enough time for meaningful engagement, oversight and input from the certifying executives is critical. The certifying executives are personally responsible for the certified reports, and they should be afforded enough time to read the reports, understand what they are certifying, and be comfortable with the process. Among other things, they should

- Receive regular reports from those within the company most closely involved in preparing the report;

- Have a meaningful opportunity to ask questions of those individuals;

- Consult legal counsel, external auditors and other professionals; and

- Make revisions to the report as appropriate.

Legal or other personnel can assist the certifying executives in these efforts by arranging for disclosure committee meetings with the certifying executives to outline the process, to review anyissues that may have arisen during the process, and, at the end, to conclude and evaluate the process.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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