Resources for Sarbanes-Oxley (SOX)

The Sarbanes-Oxley Act: Six Years Later

www.amateureconomists.com

The Sarbanes-Oxley Act came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance following scandals like the collapse of Enron. It is mandatory and all organizations - large and small - must comply. It has raised the bar for public companies, and failure to comply can result in harsh penalties. A key to compliance with this law is to implement an accounting system that offers an extensive audit trail, including extensive drill-down and drill around capabilities.

Critics have argued that the Act has damaged American competitiveness and made it less attractive for foreign companies to list in the American markets, driving initial public offerings abroad. It has also been criticized for increasing the cost for American companies without any significant benefit.

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