Racing Towards a SOX Deadline 

2 Min. Read

Meeting The Expectations of Both Auditors and Management Under a Tight Time Frame 

At A Glance 

Company Type: Small, public 

Industry: Life Sciences 

Solution Area: Sarbanes-Oxley Compliance 

About The Client 

A rapidly growing clinical-stage biotech company in the San Francisco Bay Area with a tiny finance and accounting team 

Challenge 

Moving at a fast clip, and about to take on new systems implementations, a biotech company made an unexpected discovery:   

It would have to comply with SOX 404(b), the auditor attestation of internal controls over financial reporting, and year-end was just six months away. While SOX process documentation was sufficient for management’s purposes, it wasn’t going to meet 404(b) requirements. The company needed to raise the bar on how controls were designed, documented, and executed—and soon. And it already had a lot on its plate. 

Solution 

• ZRG’s SOX experts quickly assessed the situation to identify current risks and existing controls and determine any gaps that required immediate attention. One was a hard truth: The current team wouldn’t be able get all the work done in time on its own. 
• Our consultants apprised the team on the more rigorous compliance demands of SOX 404(b)— the current practices weren’t going to cut it. 
• ZRG advocated for the best solution for the client—by finding the right balance between external auditor expectations and what the client was prepared to tackle. 

Results 

• Well-designed SOX program that addresses significant risks, with documentation and testing efforts proportionate to those risks, nothing was overbuilt 
• Successful annual SEC filing with no reportable control weaknesses 
• Detailed documentation gives management peace of mind that consistent quality of work will be upheld 
• Auditors could fully rely on ZRG’s work, minimizing disruptive impacts to the client and reducing overall compliance costs 
• Balance achieved between auditor and client expectations 

“ZRG really helped us understand the incremental rigor required for 404(b) and what it would take to be successful. I appreciate their partnership on this journey and their role in our success.” 

- Principal Accounting Officer