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Home >Sarbanes Oxley >
Description: The 2002 act oxley sarbanes law was introduced due to financial scandals and lack of corporate oversight especially in high profile cases such as Orange county, Tyco, Worldcom and Enron.
Many companies and shareholders suffered billion dollar losses, reducing pension funds of the mainstream American, as well as other worldwide citizens.
This affected financial markets and investor trust. Somehow investor trust had to be restored to the markets. This was whenthe SOX (oxley sarbanes) 2000 Act was created.
Following the collapse of Enron Corp in late 2001 regulations to address the failures in the governance, internal controls and disclosure practices of public companies were introduced.
A key part of the Sarbanes Oxly law, was to define and document internal controls of financial systems and processes.
Also, regulations will be putting more pressure on IT, as they have to do far more auditing and internal controls to ensure there is little conflict of interest. Sarbanes Oxley will force firms to take enterprise content management seriously for issues like content security and records retention.
Therefore many software companies have produced their software with regulation specific add ons to automate compliance further.
As many companies were having problems meeting deadlines, the US Securities and Exchange Commission, the SEC, extended the deadline by five months for complying with Sarbanes Oxley Section 404, related to internal controls and documentation compliance and financial reporting improvements. The date is Nov. 15, 2004 and was originally June 15, 2004.
The 2002 act oxley sarbanes is applicable only to publicly traded companies, however many non-profit companies should take heed of the advice and implement some of it where possible Private firms are implementing Sarbanes Oxley. The 2002 act also contains certain employment related provisions and expands protection under federal law for employees who report certain allegations of corporate misconduct - whistleblowers!
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