What is the Sarbanes-Oxley Act (SOX)?

The Sarbanes-Oxley Act (SOX) is a federal law passed in 2002 in response to public outcry about corporate corruption and mismanagement. SOX, also known as the Public Company Accounting Reform and Investor Protection Act, was designed to protect investors from fraudulent financial practices by ensuring that companies accurately report their financial information. SOX focuses on the accuracy and reliability of financial reports by requiring companies to have in place a system of internal financial controls and procedures to detect fraud or inaccuracies. This means that companies must create periodic reports with accurate and timely financial information, such as balance sheets and income statements. SOX also requires companies to have an independent auditor review and certify these reports. In addition, SOX requires that companies have a code of ethics that outlines procedures for accounting, auditing, and filing information with the SEC. Executives of publicly traded companies must also certify that their financial reports are accurate and that the company is in compliance with SOX. In Florida, SOX is enforced by the SEC, the Financial Industry Regulatory Authority, and state regulators, such as the Florida Office of Financial Regulation. Companies that fail to comply with SOX are subject to potential civil and criminal penalties. Ultimately, SOX is intended to help protect investors by ensuring that companies provide accurate financial information.

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What is the Sarbanes-Oxley Act (SOX)?

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