Audit Support
Sarbanes-Oxley 404 Testing
A sustainable SOX Section 404 compliance program requires a framework covering people, processes and technology. Avidiant can help you implement this framework and provide end-to-end SOX Section 404 compliance solutions encompassing both business and technological objectives.
Our approach to SOX Section 404 consulting combines expertise in the public accounting industry. Our consultants consist of professionals with accounting and auditing qualifications from the Big 4 firms, with multiple years of experience in an array of industries.
Using our top-down approach
In a top-down approach, your company’s external auditor identifies the controls to test in a sequential manner, starting with company-level controls and then drilling down to significant accounts at the financial-statement level, and then relevant individual controls at the process, transaction, or application levels. The top-down approach enables the auditor to focus early in the process on matters that may have an effect on the auditor’s later decisions about scope and testing strategy, such as activity-level controls.
PCAOB Auditing Standard (AS) 2 was designed to encourage the external auditors and your company to take this top-down approach because it will prevent from spending unnecessary time and effort documenting a process or testing a control that is unlikely to assist in detecting a material misstatement in a company’s financial statements.
At Avidiant we use the top-down approach to test controls on behalf of management and prepare all working documentation so that your external auditors can rely on the work performed, which can reduce their scope of testing which could reduce the costs associated with SOX.