Transaction risk intelligence
Automated supplier statement reconciliation
Supplier risk intelligence
Managed AP recovery audit
Supplier file performance review
Forensic risk analysis
Consulting and bespoke reporting
Update: Please note that a press release in October 2023 stated that this legislation was withdrawn. instead, there is a review for non-financial reporting.
What is UK SOx?
UK SOx is the informal term used for the Corporate Governance Regime, the 2024 edition of the UK Corporate Governance Code. Named because of the similarity to the U.S. Sarbanes-Oxley (SOx, or SarBox) Act, it aims to strengthen corporate governance standards across the UK. To this end, the UK Government established the Audit, Reporting and Governance Authority (ARGA).
The UK Corporate Governance Code 2024 focuses on financial disclosure requirements and internal control measures. It is designed to give more control around audits, increase transparency for shareholders, ensure accurate reporting, identify risks sooner, and prevent fraud.
Who is impacted by UK SOx?
According to the Financial Reporting Council website, the regulations are applicable to premium listed companies on the London Stock Exchange.
How would the legislation affect AP departments?
The regulations would have caused board members in an organisation to take a deeper look at their financial reporting, and the aspects of what they need to report. The guidance on this covers audit risk and internal control, and that’s where it may affect the procure to payment process. It dictates that organisations should be establishing and maintaining an effective risk management and internal control framework. It’s therefore important to review current risk management controls and ensure they are stringent.
The business would ask; are we doing enough in our internal controls to satisfy the regulations? If it is decided your organisation is not doing enough, plans will be made to rectify it. That can include implementing a new way of working, automation, or software. For example, it is explicitly stated in the guidance that ‘given their size and complexity, FTSE 350 companies should consider having an internal audit function.’ Fraud is also brought up specifically as an example of material controls, insinuating that this is an important area that shouldn’t be overlooked, and that strong fraud controls should be in place.
How can you prepare for UK SOx?
We recommend first preparing for UK SOx compliance by first creating a risk and control matrix for your accounts payable controls. It’s important to look at fraud, accuracy, overpayments and optimising your team’s time.
Some of our US friends have told us that regular statement reconciliation is an essential internal control for SOx regulatory compliance. It ensures your ledgers are accurate and that you have an internal control in place to guard against fraud and other errors. Now, we know that this is a daunting task when you have a huge supplier file, but with the right automation, you could be reconciling most, or all, of your suppliers every month.
Although the exact update on this legislation is unknown, it’s clear that the Government are asking for more stringent fraud and risk controls, and further legislation changes will support this.
How FISCAL helps your internal fraud and risk controls.
FISCAL provide AI-based software which continuously checks your suppliers and transactions against an array of criteria and alerts you immediately if it finds risks. This is designed to safeguard your organisation against risks, including fraud.
Our software is a thorough control to ensure transaction accuracy, checking every invoice, and every supplier. This in-depth scrutiny helps to streamline the audit process and reduce workload, as finding these discrepancies is completed before the payment run and is part of that final checking procedure.
The software detects a broad range of errors and anomalies. In transactions, these include duplicate invoices and fraud identifiers, like suspicious invoice entry times, duplicate suppliers, and dubious figures.
As previously mentioned, statement reconciliation is an important measure to ensure ledger accuracy, and to find missed overpayments, credits or rebates. Our automated solution matches a statement in as little as 7 seconds, and with bulk upload functionality, saves time so your team can correct exceptions quickly.
The software also retains a full audit trail, showing changes, dismiss actions and more.
