What is the Sarbanes-Oxley Act (SOX)?

The Sarbanes-Oxley Act (SOX) is a federal law passed in 2002 to protect investors from fraudulent and deceptive financial practices by public companies. This law was passed in response to the accounting scandals that occurred at Enron, WorldCom, and other companies in the early 2000s. SOX requires public companies to adhere to a set of standards for their financial reporting and internal control systems. This includes having an independent audit that certifies their financial information, having the board of directors review and approve their periodic financial reports, and properly documenting all financial transactions. In California, SOX applies to all publicly traded companies in the state, as well as California companies that are registered with the U.S. Securities and Exchange Commission. California companies are also required to follow the rules and regulations set out in the California Corporations Code, which impose additional requirements and restrictions on their operations. SOX is an important law that helps to ensure that investors have access to reliable financial data and helps protect them from unscrupulous business practices. By holding companies and their executives accountable for accurate financial statements and other financial disclosures, SOX helps to maintain the trust and confidence of the public in the financial markets.

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What is the Sarbanes-Oxley Act (SOX)?

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