SOX is a shortened term for the Sarbanes-Oxley Act. This was passed in 2002 and is designed to handle internal controls and reporting to protect current and potential future stakeholders from accounting errors, inaccuracies in corporate disclosures, and fraudulent practices. The goal of SOX compliance is to increase transparency in financial reporting by corporations and create a system of checks and balances in each company.
Sarbanes-Oxley applies to all publicly traded companies in the United States as well as wholly-owned subsidiaries and foreign companies that are publicly traded and do business in the United States
The most important requirements outlined by SOX are:
The first step for SOX compliance is planning and implementing internal controls to protect the integrity of financial data. This could include controlling, access, tracking threats, logging change history, and more. These controls should also be regularly assessed to prevent new vulnerabilities from being exploited. It’s also wise to update your reporting and internal auditing systems so that you can pull any report in preparation for a SOX audit.
If you have more questions or need help with SOX compliance, the professionals at Red Lion are here to help. Contact us below and we’d be glad to lend a helping hand.
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