Client Snapshot
A recycling technology company was commercializing a patented technology licensed globally from P&G. The company helps global brands advance their sustainability goals by expanding access to high-quality recycled materials.
The company’s SOX control environment had evolved into a complex landscape of overlapping and duplicative controls, inconsistent control design and ownership, and limited alignment between key risks and control activities. The need for greater clarity and scalability led to a comprehensive rationalization of the SOX control framework.
The Challenge
- Existing process documentation did not clearly reflect how activities were performed or where key controls operated.
- Where the control designed was accurate, the control procedures were not adequate to meet the control objective.
- The control inventory had expanded without sufficient rationalization, resulting in overlapping controls and an increased burden on process owners and testers.
- Linkages among financial reporting risks, control objectives, and control activities were not consistently defined.
Our Approach
- Conducted process design walkthrough with process owners to understand actual workflows, control activities and systems.
- Developed end-to-end “as-is” process flowcharts and control narratives to establish an accurate view of the operating environment.
- Assessed each control for relevance, design adequacy, risk coverage, duplication, and testability, identifying design gaps and controls that did not effectively address SOX risks.
- Consolidated similar activities, removed unnecessary controls, and rewrote control descriptions to improve clarity.
- Defined testing attributes aligned to control objective and control documentation requirements for the retained controls.
Results Delivered
- Achieved 20% reduction in total controls, improving efficiency and reducing testing burden.
- Delivered an updated RCM with clearly articulated financial reporting risks, control objectives, control activities, ownership, and related testing procedures.
- Produced revised process flowcharts reflecting current workflows, system touchpoints, and key control activities.
- Established testing attributes and evidence standards to support consistent control assessment.
- Equipped senior management with documented rationale and supporting materials for discussions with external auditors.
Impact
The engagement shifted the company’s SOX framework from a broad control inventory to a more focused, risk-based model. Process owners gained clearer accountability, while management obtained greater visibility into how key financial reporting risks were addressed across the organization.
The redesigned framework also strengthened audit readiness by creating a consistent and defensible basis for control execution and assessment. Importantly, it established a scalable governance foundation capable of supporting the company’s continued commercialization and operational growth without adding disproportionate compliance complexity.
