The contents of this presentation are confidential. Copyright © 2017 SEC Pro Group.

2018 Survey: Top 5

Trends in SOX and

Internal Controls

November 8, 2018

SOX & Internal Controls Professionals Group

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Presenters

Joe Howell

Founder

SOX & Internal Controls Professionals Group

Alan Frank

Partner, EisnerAmper

Mike Rost

Vice President, Workiva

Agenda

1. Cost of compliance

2. Co-sourcing of compliance function

3. Top challenges

4. Control failures

5. Technology tools

6. Top priorities for 2019

1. The overall cost of SOX/IC compliance was flat or has

increased Almost half of survey respondents reported an increase in the costs of their

compliance efforts, while 44 percent reported that compliance costs did not

change.

Why is it staying flat or increasing significantly?

• Most would expect "increased slightly" due to rises in auditor

fees. But what could be scenarios that people see significant

increase? or significant decreases?

What factors are affecting increase in cost?

1. The overall cost of SOX/IC compliance was flat or has

increased

Discuss these trends year over year

• The amount of people spending $250K-$1M 2018

decreased while more people are spending <$250K

increased

• How does this relate to the last survey questions in

which most people said they were spending the same

or more

2. Co-sourcing of compliance functions has

increased • Increase in co-sourcing

• Decrease in overall internal SOX/IC compliance functions

• Why are SOX functions decreasing? The good, the bad?

• Value of co-sourcing?

3. Changes in accounting policy are the most

significant challenge for SOX/IC professionals

Implementing three significant policy changes simultaneously

· ASC 606 revenue from contracts with customers

· ASC 842 for lease accounting

· Tax Cuts and Jobs Act

• What have you been hearing from clients?

• What are they struggling with? How are the tackling each

challenge?

• Is their technology able to keep up with these mandates?

3. Most significant SOX/IC compliance challenges

continued The following challenges were most significant:

1. Changing accounting policies

2. Focus on cyber and IT controls

3. Changing requirements from external audit

4. Replacement of legacy technology

• Thoughts on this - what have you been hearing from clients?

• Does one of these stick out to you?

• Insights from clients

• Anything not here that you think people should focus on

• How to tackle each challenge

4. Manual processes are responsible for the

majority of internal control failures • Leading causes of

deficiencies are

· Human error

· Improperly performed,

enforced, or monitored

controls.

• Survey respondents that

experienced control issues

declined by 20 percent

• What can be done to reduce the top types of

errors?

• What technology can help?

• Tips on reducing errors

5. The use of desktop tools for compliance is on the

decline • The use of manual desktop

tools has declined 20

percent from the 2017

survey

• Continued trend toward

purpose-built tools for SOX

and internal controls.

• Benefits of moving away from desktop tools

• Cons of staying with the desktop tools?

• Does anything here surprise you?

• How can they stay up-to-date in the technology

world?

6. Top priorities for 2019

Survey respondents indicated the following priorities were

most important

1. Improve efficiency of the SOX function

2. Increasing focus on cyber security and IT controls

3. Ensure compliance with SOX and other regulators

• Way to close out the meeting

• Key takeaways you want to leave them with

• Top things to keep in mind in 2019

Questions?

Joe Howell

Founder

SOX & Internal Controls Professionals Group

Alan Frank

Partner, EisnerAmper

Mike Rost

Vice President, Workiva

The contents of this presentation are confidential. Copyright © 2017 SEC Pro Group.

Thank you for attending

Questions?

Camille Rudy National Director SEC & SOX Professionals Groups

Camille.rudy@soxprofessionalsgroup.org

847.702.9082