Although the Sarbanes-Oxley Act of 2002 (SOX) applies only to public companies, there are internal control components to it that can help build, maintain and improve the value of private companies and not-for-profit organizations.
A thorough understanding of internal controls and how they create stakeholder value is critical for any organization, including private companies and not-for-profits. It is the responsibility of the board of directors and management to effectively govern risk.
An effective system of internal controls forms the foundation necessary to build, maintain and improve stakeholder value. For example, if an organization needs additional resources or capital, having a solid system of internal controls helps provide stakeholders with a degree of confidence. As another example, a company considering an IPO could benefit from a SOX readiness assessment.
In addition, third parties that do business with a not-for-profit organization or a private company may have policies that require internal control assessments or compliance with SOX.
How we can help
At Hood & Strong LLP, we believe that managing risk in key areas of your business helps safeguard the future of your organization. All organizations can benefit from ensuring accurate financial reporting, maintaining effective corporate governance, and mitigating threats to viability and performance.
In addition to retaining the confidence of stakeholders, effective risk management yields opportunities to improve efficiency and provides management with a better decision-making vantage point.
Our risk management approach uses the Committee of Sponsoring Organizations (COSO) of the Treadway Commission framework - the standard for internal control. Not only is COSO an integral component of our methodology, but the essence of the framework is built into our software tools.