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Why Is Data Governance Important for SOX-Compliant ALM?

Prodly Marketing

September 28, 2023

In this blog, we discuss the importance of data governance for SOX-compliant ALM in Salesforce. We also take a brief look at the essential components that make up a compliant data management framework.

Abstract VR image representing data governance.

Data Governance Is Critical to SOX-Compliant ALM

A formal change management process is the cornerstone of maintaining compliance with the Sarbanes-Oxley Act of 2002 (SOX) in your application lifecycle management process (ALM). That said, a robust data governance framework is your second line of defense.

The Value of Data Governance

Taken as a whole, effective data governance ensures your data is created, stored, used, modified, and archived or deleted in a secure manner that safeguards its integrity. The purpose of your governance framework is to reduce data-related risks to the business. 

So how does this apply to SOX-compliant ALM? Well, to adhere to regulations, you have to ensure that changes to your Salesforce instance don’t affect the integrity of your financially-impactful data.

Imagine this scenario: A team member rushes a change straight to production, sidestepping the established change management process you have in place. 

No peer review. No approval. Simply one quick click of the mouse. And just like that, the worst-case scenario happens: This cursory change affects critical financial data in Salesforce—and it goes unnoticed.

If this error slips through the cracks, the fallout could be serious. Your financial reports would be compromised and fail to accurately reflect your company’s health. In fact, it could even constitute a direct violation of SOX and result in audits, fines, loss of investor confidence, and potential legal repercussions. 

For finance and IT professionals, it’s the stuff of nightmares. 

That’s precisely why you need a strong data governance framework. Because your change management process fails, you need other ways to maintain the integrity of your financial data. 

Essential Components of a Data Governance Framework for SOX

The key aspects of a SOX-compliant data governance framework include:

  1. Governance policy: As your playbook for managing, using, and changing data in compliance with SOX regulations, your governance policy creates a structured environment for data management. It outlines rules, procedures, and requirements specific to SOX.
  2. Data classification: Data classification is essential to determining the sensitivity of information. In Salesforce, you’ll find several predetermined classifications, including public, internal, confidential, restricted, and mission critical. These classifications allow you to make informed decisions regarding which roles can view, change, or delete data.
  3. Data protection: To prevent fraud, you need to protect sensitive financial data from unauthorized use. This involves establishing security measures, defining roles and duties, enforcing access controls, and masking or redacting test data.
  4. Data monitoring: You have to monitor your data to make sure scenarios like the one above don’t occur and to measure the effectiveness of your data governance framework in terms of SOX compliance. Use data reviews to identify missing or inaccurate data. Monitor usage to track who’s interacting with financial data and what they’re doing with it. Log all the changes you make to sensitive data, including modifications to configuration data. In addition, document all those changes so you can provide a SOX auditor with a complete history in an audit report if needed. 
  5. Backup and retention: Because data loss or corruption can result in SOX violations, you should always have one or more backups of your data. Moreover, make sure to retain your data according to regulations. If you destroy accounting records before the end of the required time period (which can be three or five years depending on the type of data), you can be subject to criminal penalties. This also goes for data you need to retain permanently, such as financial statements, check registers, and payroll registers. 
  6. Audits: Once a year, you must hire an independent auditor to review your internal controls, policies, and procedures. When it comes to data governance for SOX, an auditor will investigate your data protection, backup, access controls, and change management process. 

Data Governance: A Comprehensive Strategy

When you consider the extent of a data governance framework, it’s clear that it’s not a set-and-forget project. Instead, it’s a comprehensive strategy that impacts many aspects of your Salesforce instance—especially when SOX compliance is at stake.


What is data masking?

Data masking involves replacing original characters in the data with placeholders. It’s often used in test environments to simulate your production org without exposing sensitive data.

What types of backups are there?

There are various types of backups— full, incremental, and differential. Each has its pros and cons. Choosing the type that’s right for your company can significantly affect your recovery time in the event of data loss.

What are some common pitfalls to look out for when creating a data governance framework for SOX-compliant ALM?

Mistakes that can undermine the effectiveness of your framework include vague definitions, unclear processes, and a lack of focus on SOX requirements. Learn more about data governance for SOX-compliant ALM.


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