The Sarbanes-Oxley Act of 2002 is prompting nonprofit organizations to examine their auditing procedures and to avoid even the smallest amount of misapplication.
Drexel University, which was featured in this month’s Internal Auditor, has examined SOX and adopted the best principles to ensure that their organization is reliable and accountable.
Under the federal Sarbanes-Oxley Act of 2002, a registered accounting firm must adopt quality control standards. Many of the provisions of Sarbanes-Oxley relate to improving the quality control of the audit and improving the quality of financial reporting.
Drexel discovered different lessons that other organizations may find valuable in their implementation of SOX.
- While the initial outlay may be considerable, the long-term benefits of compliance outweigh the cost.
- Implementation leads to awareness of the importance of internal control and emphasizes the responsibilities of all employees in the organization.
- The lack of proper information technology control can make the evaluation of financial procedures burdensome.
It is important for all organizations to ensure accuracy and control in their financial reporting. For more information of Sarbanes-Oxley visit www.sarbanes-oxley.com.