Designing effective SOX program operating models is essential for aligning compliance efforts with your organization's mission and culture. By doing so, you can ensure that your SOX program not only meets regulatory requirements but also enhances governance, optimizes resource allocation, and fosters interdependent relationships that drive a stronger control environment. It is critical to understand the key benefits, roles, and responsibilities across the three lines of activities and how to leverage digital technologies for continuous improvement.

SOX roles and responsibilities across the three lines

The responsibilities of The IIA’s Three Lines Model

The Three Lines Model by The Institute of Internal Auditors (IIA) emphasizes the distinct roles of managing risks (first line), monitoring risks (second line), and providing independent assurance (third line). The governing body holds accountability to stakeholders, while management takes actions to achieve organizational objectives, including risk management. Internal Audit (IA) provides independent assurance and advice on all matters related to achieving these objectives. This model ensures a principles-based approach, focusing on risk management to create and protect value and aligning activities with stakeholder priorities.

Three options for SOX program oversight

• SOX 2nd and 3rd line activities sits in Internal audit
• SOX 2nd line activities sits in Finance Function; 3rd line activities sit in Internal Audit
• SOX 2nd and 3rd line activities sits in Finance function

Internal audit’s role in SOX

Within the Three Lines Model, IA plays a crucial role in providing independent assurance and advice on risk management and governance. As organizations face an increasing risk profile, IA may need to explore more strategic initiatives, including operational and compliance audits, to drive further value for stakeholders. This evolving role requires IA to adapt and continuously improve to meet the changing demands of the business environment. The potential of Internal Audit 4.0, which is purpose-driven and digitally powered, can further enhance your SOX program by promoting continuous improvement and stakeholder engagement.

Leveraging digital technologies for continuous improvement

In addition to the roles and responsibilities across the three lines, a purpose-built SOX program operating model emphasizes the importance of digital technologies. Engaging IT teams to bring technical solutions in the SOX environment is a critical step in enhancing the efficacy and effectiveness of your SOX program. By integrating IT skills across the three lines, organizations can drive continuous improvement through automation and efficiency. This includes designing and testing controls, providing technical insights and remediation plans, and leveraging digital technologies to improve the overall control environment.

From compliance to competitive advantage

Navigating the complexities of SOX compliance can be challenging, but a purpose-built operating model can make all the difference. A purpose-built SOX program operating model is more than just a compliance framework; it's a strategic asset that boosts governance and resource allocation and drives continuous improvement. By understanding and implementing the roles and responsibilities across the three-line activities and leveraging digital technologies, organizations can transform their SOX programs into robust systems that support sustainable growth and resilience.

Ready to transform your SOX compliance? Download the full report to explore detailed case studies and discover how a purpose-built SOX program operating model can drive your organization’s success.