Identifying the Measures of Regulatory Compliance Controls

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Regulatory Compliance Controls The purpose of this project is to identify measures of internal control that ensures compliance with Sarbanes Oxley Act Section 404 and how the costs of compliance may be used to add business value for shareholders. The key requirements of SOX include definition, documentation, implementation, and assessment of effective controls to ensure the integrity of corporate financial information and the prompt reporting of material events that may affect the financial performance of the firm (Moeller, 2007). A survey conducted by Audit Analytics showed that internal control over financial reporting weaknesses from 2004 to 2005 improved, but still had companies with material weaknesses in both years (Bedard, 2007). This shows there is a need for more identification for continuous improvement. Threats to accounting systems come from various sources and can destroy the relevance and reliability of financial information, if ignored (Beard, 2007). Because IT governance defines the IT structuring measures, and monitoring framework, it should include business value (Robinson, 2005) and, since corporate governance drives and sets IT governance (Lainhart IV, 2000) the corporate governance is required for compliance with SOX Section 404. According to (Peterson, 2004), IT governance is the key to realizing IT business value. With the high costs of compliance that include the possible needing additional software and hardware, consultant engagements, additional

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