What is the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act, also known as the SOX act, was a major piece of corporate and securities law legislation that was enacted in 2002. The law is named after its sponsors, Senator Paul Sarbanes, and Representative Michael G. Oxley. The purpose of the Sarbanes-Oxley Act is to protect shareholders and the general public from fraudulent accounting and reporting practices that may be used by publicly-traded companies. The law requires companies to maintain accurate and complete financial records. It also sets forth rules to promote ethical corporate behavior and increase the accuracy and reliability of financial reporting. The act establishes rules on how corporate executives must handle conflicts of interest, insider trading, and document destruction. It also requires companies to maintain a code of ethics and to regularly report their financial condition to the Securities and Exchange Commission. The Sarbanes-Oxley Act applies to publicly traded companies as well as those that may become publicly traded in the future. In South Carolina, the Public Service Commission oversees the act and enforces its requirements. Penalties for non-compliance can include criminal charges or fines, and the act has been successful in reducing financial fraud and improving corporate governance in the United States.

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What is the Sarbanes-Oxley Act?

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