Sarbanes-Oxley Act Compliance
Your Guide to SOX Compliance
Weekly coverage of industries complying with Sarbox
The Sarbanes-Oxley Act (SOX) has had deep effects in business since it became law on July 30, 2002. Management of most public companies had a time and dollar-consuming road to compliance with the SarbOx rules. SOX focuses on financial and accounting issues but effects other functional areas such as supply chain, human resources and Information Technology (IT). FierceSarbox is rare in its weekly news coverage of the wide range of issues in Sarbanes-Oxley compliance.Section 302 requires CEOs and CFOs to certify the accuracy of all annual and quarterly reports in addition to the quality of internal controls over the reports – violations are penalized with prison sentences. One particular sticking point of Sarbanes-Oxley is Section 404 of the Act. Its intention is to allow investors to have confidence in a company’s financial reports as well as the underlying processes and controls that produce the reports. Section 404 means companies must review processes, enhance documentation and monitor for consistent adherence to controls.
SOX compliance even extends to seemingly small details. SOX Section 406 requires management to include their code of ethics as an exhibit in its annual report or Web site and provide free copies on request.
Avoiding SarbOx compliance is attractive to some companies. Registration with the Securities & Exchange Commission can be optional when securities are sold strictly to institutional investors which avoiding the Sarbanes-Oxley Act's requirements for proof of effective financial controls. Some analysts predict companies may avoid SOX by going public in Europe.
Besides short-term compliance, the difficulty ahead is finding an effective method of sustained compliance for the future of the company (or of the SarbOx law). Control and responsibility for compliance must be spread throughout the business. Companies still await a technology solution that reduces man hours spent on SOX requirements.
FierceSarbox monitors the issues that arise from Sarbanes-Oxley compliance, Section 404 and more, in one convenient, weekly (and free!) newsletter.
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