What is the Sarbanes-Oxley Act (SOX)?

The Sarbanes-Oxley Act (SOX) is a federal law that was passed in 2002 in the United States. It was created in response to major corporate scandals, such as Enron, that caused investors to lose billions of dollars. SOX regulates how public companies are to conduct their business and assures that companies are accountable for their financial statements. This law requires that public-traded companies have more transparency and better disclosure in their financial reporting. It also increases the penalties for fraud and other illegal activities. Public-traded companies must have an audit committee, which is responsible for setting up internal controls, implementing financial reporting systems, and preventing fraud. They are also required to provide real-time disclosures to investors and the public. SOX is also responsible for protecting whistleblowers from harassment or retaliation from employers. It requires that employers must create procedures for employees to report fraud or other improper activities without fear of retribution. SOX was designed to restore public confidence in the financial markets and corporate sector. It has had a major influence on the way corporations do business and has provided better protection for investors and the public. It has also increased the accountability of business executives and public-traded companies.

Related FAQs

What is a privacy policy?
What is the role of encryption in data security?
What are the key principles of data security?
What is the importance of data security awareness and training?
How can I keep my data secure?
What are the security requirements for mobile devices?
What data security laws are in place in the United States?
What is the scope of GDPR?
What measures should I take to protect myself from data security threats?
What is the data minimization principle?

What is the Sarbanes-Oxley Act (SOX)?

Related FAQs

Related Blog Posts