The Institute of Internal Auditors (IIA) is urging Congress to revisit the Sarbanes-Oxley Act of 2002, suggesting that updating the law could better recognize the vital role internal audit plays in our current compliance landscape. In a recent position paper, the organization shared recommendations to enhance the broader assurance ecosystem, while also considering ways to manage the costs and complexities of SOX compliance.  

The call for reform is happening at a time when lawmakers are paying more attention to SOX again. There have been recent talks about how the PCAOB is structured and hearings about the costs of compliance. The paper mentions that “these activities indicate a potential enhanced interest by some Members of Congress in revisiting the law,” and it also points out that while SOX doesn’t specifically mention internal audit, regulators are increasingly recognizing how important it is.  

Some of the suggestions include formally defining internal auditing in the law, taking a new look at how internal audit supports Sections 302 and 404, and enhancing coordination between internal and external auditors. The paper also highlights opportunities to lower compliance costs by embracing new technologies and adopting more integrated assurance practices.  

IIA President and CEO Anthony Pugliese highlighted the importance of updating the law to match the evolving risk landscape, saying, “Since its enactment more than two decades ago, SOX has served as a cornerstone of corporate governance, financial reporting integrity, and confidence in US capital markets…As the risk landscape continues to evolve, it is important that SOX evolves with it.”