SOX:

Sarbanes-Oxley

In response to a decline in public trust following the US auditing scandals surrounding Enron, WorldCom, and others, The Sarbanes-Oxley act (SOX) was sponsored by Senator Paul Sarbanes and Representative Michael Oxley.

SOX became Federal law in July 30, 2002. By requiring public companies to adhere to certain standards, SOX aims to protect investors. SOX puts in place new requirements surrounding auditor independence, information integrity, and greater financial disclosure.

Who’s affected?

All U.S. public company boards, management and public accounting firms.

What must they do?

SOX contains 11 titles or sections, ranging from Corporate Board responsibilities to criminal penalties. Those most important for compliance are:

• SOX Section 302 - Corporate Responsibility for Financial Reports
  CEOs and CFOs must review and ensure accuracy of all financial reports and accounting controls…
• SOX Section 404: Management Assessment of Internal Controls
  Management must include an Internal Control Report with all Annual financial reports stating that is responsible for an "adequate" internal control structure…
• SOX Section 409 - Real Time Issuer Disclosures
  Companies must immediately disclose information concerning material changes in its financial condition or operations…
• SOX Section 902 - Attempts & Conspiracies to Commit Fraud Offences
  It is a crime for any person to alter, destroy, mutilate, or conceal any document with intent to impair an official proceeding…

How can D&B help?

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