A Security Pro’s Guide to Sarbanes-Oxley (SOX) and Access Reviews

Read full article here: https://claritysecurity.com/clarity-blog/a-guide-to-sox/?source=nhimg

The Sarbanes-Oxley Act (SOX) of 2002 reshaped corporate governance in the wake of major financial scandals, introducing stringent controls to ensure financial reporting integrity. For IT security leaders, SOX remains one of the most important regulations linking identity governance, access control, and compliance. Section 404 (SOX 404) specifically requires organizations to implement and prove effective internal controls over financial reporting, making identity and access management (IAM) central to compliance.

Why SOX Drives Identity Governance

SOX requires organizations to demonstrate that only authorized users can access financial systems and data. Auditors demand detailed access proofs, making identity governance, user provisioning, and access certification critical to passing compliance checks.

Key SOX 404 Requirements

1. Internal Control over Financial Reporting (ICFR) - Management must maintain effective access controls ensuring accurate financial data.

2. Management Assessment - Annual reviews must verify control effectiveness.

3. Auditor Attestation - External auditors must validate management’s assessments for large public companies.

SOX Controls and Identity Governance

SOX controls fall into five categories, each with strong ties to IAM:

• Preventive Controls - Role-Based Access Control (RBAC), SoD policies.
• Detective Controls - Access reviews, orphan account detection.
• Corrective Controls - Processes for fixing reporting errors.
• Entity-Level Controls - Organization-wide access certifications.
• Process-Level Controls - Approval workflows for financial transactions.

Core SOX Access Management Requirements

To remain compliant, organizations must enforce:

• Least privilege user access controls with pre-approval.
• Periodic access reviews (quarterly preferred, semi-annual minimum).
• Termination remediation ensuring immediate access revocation.
• Monitoring and logging of system access with full audit trails.
• Strong authentication such as MFA and secure password policies.

SOX Access Certification Best Practices

• Frequency - Quarterly reviews (gold standard); semi-annual for lower-risk systems.
• Scope - Financially relevant systems, privileged accounts, third-party access.
• Process - Independent reviews, risk-based focus, detailed documentation, and automation to reduce human error.
• Integration - Align access certifications with provisioning, de-provisioning, and change management.
• Metrics - Track remediation time, number of issues, and report outcomes to leadership.

Segregation of Duties (SoD) Requirements

SOX enforces segregation of critical tasks (e.g., one person cannot both approve and execute financial transactions). To comply:

• Define and enforce role-based access.
• Review and approve all role changes.
• Document compensating controls where strict SoD cannot be applied.

How Clarity Security Simplifies SOX Compliance

Implementing and maintaining SOX controls is resource intensive. Clarity Security’s platform automates identity governance processes, streamlines access reviews, certifications, and SoD enforcement, and provides the audit-ready evidence companies need. By reducing complexity and cost, Clarity enables organizations to meet compliance with confidence.