financial-compliance-sox

Financial Compliance — SOX

Overview

SOX (Sarbanes-Oxley Act) Section 302 and 404 require publicly traded companies to maintain documented internal controls over financial reporting (ICFR). For e-commerce, this means implementing controls across the order-to-cash and procure-to-pay cycles: segregation of duties (no single person can initiate and approve a financial transaction), approval workflows for high-value transactions, automated reconciliation, and immutable audit evidence. SOX compliance is primarily a process and documentation challenge, not a software challenge — but the systems you build must generate auditable evidence that controls are operating.

When to Use This Skill

• When your company is preparing for an IPO and must establish SOX-compliant ICFR
• When external auditors are requesting evidence of IT General Controls for your e-commerce platform
• When building approval workflows that demonstrate segregation of duties
• When designing access controls for systems that feed financial statements
• When remediating a material weakness or significant deficiency identified by an auditor

Core Instructions

Step 1: Map your financial data flows and control points

Before any configuration or code, document which systems contain financial data and what controls apply. SOX auditors want to see this documentation:

Order-to-Cash control points:

• Order entry → Payment capture → Revenue posting
• Key controls: approval for high-value orders, fraud rules, GL auto-posting, monthly reconciliation

Procure-to-Pay control points:

• Purchase order creation → Invoice matching → Payment release
• Key controls: 3-way match for POs above threshold, dual approval for large payment runs

Document each control with:

1. Control objective (what risk does this control mitigate?)
2. Control owner (which role performs this control?)
3. Frequency (continuous, daily, monthly, per transaction)
4. Evidence (what record proves the control operated?)

Step 2: Platform-specific SOX implementation