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Case Study One: SOX Compliance – Auditing Expertise and Resources Provided to a Pharmaceutical Company

Summary Level

An SEC-registered pharmaceutical public company and large accelerated filer with revenue increases from approximately $150 million to $600 million in 3 years required additional internal auditing expertise and resources to meet new and changing compliance and internal control requirements.

Details

Client’s Situation:

An SEC registered pharmaceutical public company and large accelerated filer develops, manufactures, markets and distributes a broad spectrum of pharmaceutical products in a variety of dosage forms. The company’s revenue increased from approximately $150 million to $600 million in a period of 3 years through a combination of internal growth and acquisitions. The Company required additional internal auditing expertise and resources to meet new and changing compliance and internal control requirements.

Accounting and Business Consultant’s Engagement Role:

We were engaged by the Company’s management team to assist with internal audit compliance efforts by providing auditing and internal control leadership expertise and internal audit and IT auditing resources. The Company’s requirements consisted of all aspects of Sarbanes Oxley (SOX) and internal control compliance, including conversion to the new 2013 COSO requirements and new deadlines from its change to a large accelerated filer for SEC reporting purposes.

Engagement Results:

Management was able to improve and more clearly document its risk assessment process, more clearly define as well as enhance entity level controls and the related documentation, implement an IT control framework while updating and creating new IT policies and procedures, and implement best practices for monitoring activity level and IT controls. Through a more efficient approach, overall compliance costs have become easier to manage. Executives and the Audit Committee of the Board of Directors receive clear and concise updates on a regular and ongoing basis. In addition, internal control and compliance efforts were extended to multiple subsidiary locations resulting from acquisitions.