Future of Sarbanes-Oxley Act

The purpose of the Sarbanes-Oxley Act was to curb the tendency amongst big corporate to play with public money and one fine morning file for bankruptcy and then the game of pointing fingers would start leaving the poor investor in the lurch.

The growth of the accounting scandals and growing abuse of the loose public reporting of financial accounts led may companies to swindle billions of public money and file bankruptcy. The Sarbanes-Oxley Act has emerged as a nightmare for the companies getting their accounts audited for almost all the companies but no one is questioning the need of having such a law. The Sarbanes-Oxley Act came into force in 2002 and due to its complex nature the financial statements of almost all the companies were delayed beyond the normal period. Huge amount of paper work was generated. All other IT projects were stopped midway as the existing ones were needed to be made SOX compliant. The implementation of the Sarbanes-Oxley Act delayed a huge number of corporate projects as their timings clashed with the timing of filing returns under the Sarbanes-Oxley Act every quarter, mid year and year end. But law is law and needs to be honored. So the project managers took up the challenge and implemented Sarbanes-Oxley Act along with their usual projects.

After half a decade of Sarbanes-Oxley Act where do we stand? One thing is very clear that Sarbanes-Oxley Act will stay. To meet the Sarbanes-Oxley Act compliance each project will have to have an additional layer of compliance checks at every process and procedure that involves financial transactions. Luckily of the privately held companies the Sarbanes-Oxley Act is not applicable. The Sarbanes-Oxley Act is applicable to those companies which use public money make all efforts to rope investors to fund their projects. To protect the interest of the investing public the Sarbanes-Oxley Act was enActed.