Challenge of addressing SOX Compliance
All public companies are required to comply with the Sarbanes-Oxley Act (SOX). Passed by the United States Congress in 2002, SOX is designed to protect shareholders and the general public from fraudulent accounting and business practices. Signed into law after a series of high-profile corporate financial scandals, mandatory SOX compliance is intended to enforce corporate governance and accountability through comprehensive internal checks and balances. The act demands extensive and expensive recording standards, as well as enforces steep fines for non-compliance.
Sarbanes Oxley requires all publicly traded companies to report their internal accounting controls to the Securities and Exchange Commission (SEC), even calling on the CEO and CFO to personally attest to the completion and accuracy of their records. Failure to comply with SOX compliance can lead to significant personal fines for senior executives and even jail time. To ensure measures for transparency, Sarbanes Oxley enhances whistleblower protections to encourage the reporting of illegal activities that may not be exposed readily or through a SOX audit. In addition, the act gives the U.S. Department of Justice authority to criminally charge employers who retaliate against whistleblowers, effectively raising the bar for organizations to create environments with zero tolerance for retaliation.
Train to Ensure SOX Compliance