LogicManager’s SOX/ICFR Risk and Materiality Assessment Solution
Here’s how you’ll be set up for success with LogicManager’s ICFR Risk and Materiality Assessment solution package:
- LogicManager’s centralized risk library provides out-of-the-box best practices to serve as a foundation for all your risk assessments. This library includes a comprehensive template for your financial risk and materiality assessment.
- Leverage any of our numerous frameworks and industry standards to guide the development of your controls and monitoring efforts.
- Beyond the content you’ll gain access to, as a LogicManager client, you’ll be assigned a dedicated pair of Advisory Analysts who will help migrate any existing data you have and can prescribe best practices as observed from other successful client implementations.
- Through our Financials Taxonomy, reference all standard financial assertions. Tag controls with corresponding assertions and associate them with relevant financial elements. You’ll also be able to document financial goals and plans and tie this information back to the risk and materiality assessment.
- Our reporting tools can be used for any aspect of your risk management program.
- A Work Book Plan Report offers a comprehensive picture of testing backed up by assessments, mitigations, and monitoring activities along with the relevant details organized into sections as your compliance team and auditors expect.
- The results of our automated completeness testing will enable you to provide evidence that relevant risks and assertions are validated and covered adequately.
- Provide evidence of effectiveness for anti-fraud and other policies, reliance on entity-level controls where appropriate and a stronger control environment
Areas for Efficiency & Cost Savings
While cost savings varies in form and degree, after the first year of using LogicManager’s SOX/ICFR Risk & Materiality Assessment solution package, organizations increase their efficiencies by 10-40%. Here are 5 reasons why:
1: LogicManager users can directly link SOX controls to their IT systems and applications to streamline their testing processes.
2: Applying a top-down strategy to control testing eliminates duplicative work and ensures alignment.
3: Risk assessments of assertions related to material financial statement line items help to objectively prioritize higher risk control testing.
4: Our software is easy to use and train others on using, meaning our users increase collaboration from company personnel and third parties.
5: AI technology identifies opportunities for consideration of similar activity-level controls, which helps connect departmental efforts and reduce redundancy of review activity by SOX external audit teams.
What is a SOX/ICFR Risk and Materiality Assessment?
It’s critical to lay the foundation for an effective SOX testing program by using a top-down and risk-based approach. This means defining the scope of your SOX program to determine the materiality and risks that are managed by your key SOX controls. The Institute of Internal Auditors and the SEC strongly recommend doing so in their guidance.
A strong SOX/ICFR risk assessment will identify which controls are most important and why. This is extremely valuable evidence for an organization’s CFO and executive management when working with external auditors in negotiating whether new controls should be added, or if current controls should no longer be in scope.
There is often a gap between the Compliance team’s responsibility for SOX testing and the Finance team’s management of the risk and assertions over financial statement line items. It is essential to bridge the two teams in order to identify the key controls in place. Only then can you properly determine whether or not the risks to these assertions are being effectively managed.
