The Sarbanes-Oxley Act of 2002 (SOX) introduced new and expanded existing standards for all listed US companies and their board members.
New and expanded existing standards for all listed US companies and their board members.
The Sarbanes-Oxley Act was introduced in 2002 as a reaction to the accounting scandals of some American corporations. The Act intends to improve the reliability of the reporting of corporations which make use of the US capital markets. According to Section 404 of the Sarbanes-Oxley Act, every annual financial report must include an assessment of the effectiveness of its internal control system provided by the company's management as well as an opinion by the auditor on the effectiveness of the internal controls regarding the accounting. Adhering to these standards presumes that the company has a comprehensive understanding of its business processes and internal controls.