The Sarbanes-Oxley (SOX) Act of 2002 was signed into effect in the United States in an attempt to restore investor confidence in the markets after an extended period of scandal involving high-profile public companies in that country.
The Act had an immediate and significant impact on corporate governance in America, requiring public companies to perform internal control tests, strengthen audit committees and make company directors personally liable for the accuracy of financial statements (with the threat of criminal prosecution, jail time and/or hefty fines if they’re found to have knowingly or willfully made a false certification). It also introduced changes to the way in which public accounting firms operate their business, and established stricter, criminal penalties for securities fraud.
What Does This Mean For South Africa?
As the world’s largest economy, anything America does has a significant effect on the rest of the world. However, in South Africa, the basics of the Sarbanes-Oxley reforms have actually been commonplace in our auditing practices long before the Act was signed into law in the US.
The madatory implementation of auditing codes of conduct and independent regulatory boards to support independent auditing practices dates back to the mid 1950s in this country. Formal codes of governance, which highlight the need for companies (including audit firms) to adhere to ethical business management, were introduced after our Independence in 1994.
Just over a decade later, the Auditing Profession Act No. 26 of 2005 saw the establishment of the Independent Regulatory Board for Auditors (IRBA), whose role is to protect the public by regulating the auditing profession and establishing auditing and ethics standards.
It’s a job it clearly does very well, as in 2015, South Africa received the number one ranking for the strength of auditing and reporting standards for the sixth consecutive year, according to the World Economic Forum’s Global Competitiveness report.
The Importance of an Audit Trail
A successful audit cannot be measured by the final report alone. It needs to be supported by a comprehensive audit trail that captures every decision, data input, policy version and approval. This ensures that any further questioning can be traced back to the point of origin, providing the transparency and accountability required by the IRBA.
MailMech offers a comprehensive range of Auditing and Tracking Solutions, as well as Email and Electronic Solutions, to help you maintain a comprehensive audit trail, including:
- All Bus services
- All data processing
- Delivery Channels
- Distribution process
- Job Status
- Real time user access
- Online using queries
- Custom hardcopy reporting
Don’t be caught short. Contact us today and let us help you make sure you’re completely compliant.