Accounting & DisclosureTalking Shop

Talking Shop: SOX Entity-Level Control for Shared Service Centers?

By April 22, 2021April 30th, 2021No Comments

Editor’s note: The NeuGroup Process brings members together to solve problems and answer each other’s questions in a variety of forums, including online communities for specific groups—one of many benefits of membership. Talking Shop shares valuable insights from these members-only exchanges, anonymously. We welcome your responses—and any questions you want answered: insights@neugroup.com.


Member question: “Does your company have a finance/accounting shared service center?

  • “If yes, do you have a SOX entity-level control (ELC) related to monitoring the shared services center activities, e.g., error rates, reconciliations, journal entries, etc.?
  • “We’re doing a refresh of ELC’s this year and [our auditor] is suggesting we consider a new ELC specific to our shared services center.  We’re still considering the pros and cons, and have not made a final decision.”

Peer answer 1: “We have an accounting shared services center that includes payroll, accounts payable, accounts receivable, and international controllership functions.

  • “We do not have an entity-level control specific to the shared services center.
  • “Our SOX controls around reconciliations and journal entries are global controls and apply equally to whether it is done at the shared services center or elsewhere.”

Peer answer 2: “We have an accounting shared services center and we do not have an ELC related to monitoring around their activities, as the controls around reconciliations and [journal entries] are testing either at the shared services entity itself or globally. [We have the same] auditor now but we have not had discussions related to this.”

Peer answer 3: “We do have a shared services center, but we do not have an ELC related to the monitoring of those activities (naturally, individual controls within the various processes covered by our shared services are part of our SOX controls).

  • “Our auditor has not brought this up as issue. With that said, not all shared services are created equal and it is possible that in a different setup the auditor would be having the same discussion with us.”
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Justin Jones

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