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Internal Control System (ICS) & SOX

A company’s internal control system (ICS) consists of systematically designed technical and organizational rules and controls that serve to comply with guidelines and prevent damage caused by its own staff or malicious third parties. These measures can be carried out both process-independently and retrospectively, for example by internal audit, as well as process-dependently as preventive rules. Control models such as COSO or COBIT are often used as the basis for an ICS.

Internal Control Systems in Financial Reporting

In financial reporting, numerous auditing standards refer to internal control systems (ICS). The best known are the requirements in the Sarbanes Oxley Act (SOX). Different regulations apply depending on the country:

  • US: SEC regulations
  • Germany: IDW auditing standards [IDW Prüfungsstandards]
  • Switzerland: among others, provisions of stock corporation law

Internal Control Systems as a Solution

Our services in the area of internal control systems are particularly relevant for you in the following situations:

  • Founding of a new company or the spin-off of a company and the need to fundamentally establish an internal control system
  • Rapid corporate growth and the associated increasing risk that controls are neglected due to the dynamics of the company
  • Change in the legal form, e.g. into a joint stock corporation (Aktiengesellschaft, AG), or the shareholder structure (joining of private equity investors, IPO)
  • Listing on the stock exchange in the US or purchase of your company by an SEC-listed company in the US
  • Risks are identified too late due to lack of controls and lead to damage in the company

Implementation of an Internal Control System

Our services in the area of internal control systems (ICS)/SOX include in particular:

  • Analysis of your existing internal control system (ICS) in terms of its structures, processes and systems on the basis of recognized evaluation systems.
  • Identification of potential for optimization in your ICS or SOX controls.
  • Design and implementation of optimization measures in your internal control system
  • Review of the effectiveness (monitoring) of your internal control system and in particular also of the SOX controls (SOX testing)
  • Software selection and support for the implementation of tools for documentation and testing of controls in your ICS or SOX

If you are interested or have any questions, please contact us.

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 Thomas Heimhuber Director