What is the Sarbanes-Oxley Act (SOX)?

The Sarbanes-Oxley Act (SOX) is a federal law passed in 2002 that sets out standards and regulations for financial reporting and data security. It was created in response to several corporate accounting scandals that caused investors to lose billions of dollars. The purpose of SOX is to protect investors from fraudulent activity by verifiably auditing financial reports with accurate and transparent disclosure. SOX requires publicly traded companies to have their financial reports audited by independent, external audit firms. It also requires companies to keep accurate accounting records and provides guidelines for corporate boards of directors to ensure accurate financial reporting. It requires companies to be proactive in data security and to develop internal controls to protect their financial information. In the state of Hawaii, SOX has been implemented into law, and the State of Hawaii Division of Financial Institutions is responsible for enforcing it. All publicly traded companies must comply with the State of Hawaii Data Security Act. This Act requires companies to adopt reasonable administrative, technical, and physical safeguards to ensure the security and confidentiality of their customer’s private information. Companies must also provide notification to any customers whose personal information was breached or stolen due to their lack of security.

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What is the Sarbanes-Oxley Act (SOX)?

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