Aligning Basel II operational risk and Sarbanes-Oxley 404 projects

While SOX 404 and Basel II create different challenges for operational risk managers, Nick Bolton and Judson Berkey suggest there is real value in combining the efforts.

The twin challenges of Sarbanes-Oxley (SOX) Section 404 and Basel II op risk requirements' are closely aligned in spirit despite their differences. Indeed, firms that adopt different approaches, with a Basel II op risk project focused on risk aspects only and a SOX 404 project focused on financial reporting only, may cause confusion at best and institutional conflict at worst. The following suggests a design that allows for alignment of these two projects to achieve added value for an