What is the Sarbanes-Oxley Act (SOX)
SOX is the Sarbanes-Oxley Act of 2002. It was created to protect investors from the possible threat of fraudulent accounting activity by large organizations. The SOX Act outlined strict changes in an effort to improve financial disclosures from corporations, and to prevent accounting fraud in general.
Who is subject to SOX Compliance?
SOX is a mandatory act that every organization needs to comply with, regardless of the company size. All publicly-traded companies in the United States, including wholly-owned companies, and all publicly-traded non-US companies doing business in the U.S are affected. Not only that, companies that are preparing for their initial public offering (IPO) are also mandated to comply with certain aspects of Sarbanes-Oxley.
What are my Rights Under SOX?
Employees have the right to report to or assist 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 secure under this particular act.
Why is SOX Important?
All organizations that are to follow SOX, must create a financial accounting structure that can create financial reports that are continuously confirmable with source data that is traceable. This source data must stay intact and cannot be revised without proper documentation. Other than negative publicity and the threat of lawsuits, a corporate officer that fails to comply or submits an invalid certification, might face charges of up to $1 million and may even face ten years in prison, even if the errors were unintentional. If an incorrect certification was provided knowingly, on the other hand, 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/