Sarbanes-Oxley Act (SOX)
What is the Sarbanes-Oxley Act (SOX)
SOX is the Sarbanes-Oxley Act of 2002. It was put into place to protect investors from the potential threat of fraudulent accounting activity by corporations. The SOX Act emphasized strict changes as a means of improving financial disclosures from corporations, and to prevent accounting fraud in general.
Who is subject to SOX Compliance?
SOX is an obligatory act that every business must comply with, whether a large or small company. All publicly-traded companies in the United States, including all wholly-owned companies, and all publicly-traded non-US companies conducting business in the United States are affected. Furthermore, private companies that are organizing for their initial public offering (IPO) are also obligated to comply with certain requirements of Sarbanes-Oxley.
What are my Rights Under SOX?
Employees have the right to report to or help with an investigation by, an employer or a federal enforcement agency about behavior that the employee reasonably considers a violation of the Securities and Exchange Commission regulations, is mail, wire, bank or security fraud, or is fraud against shareholders.
Who does SOX Protect?
Employees of publicly traded organizations and contractors, subcontractors, and agencies of publicly traded companies, are considered protected under this act.
Why is SOX Important?
All companies applicable to SOX must establish a financial accounting structure that can produce financial reports that are continuously verifiable with source data that is fully traceable. This source data must stay intact and cannot be revised without proper documentation. Aside from negative publicity and the threat of lawsuits, a corporate officer who does not comply or submits an incorrect certification, could face up to a fine of $1 million and ten years in prison, even if the errors were done mistakenly. If a incorrect certification was provided knowingly however, the fine could be close to $5 million and twenty years in prison.
Where can I find more information about SOX?
To learn more, visit this link: http://www.soxlaw.com/