SOX is not Socks

Sarbanes-Oxley Act is categorized as ‘Corporate and Auditing Accountability, Responsibility, and Transparency Act' or 'CAARTA' Act passed by the United States Senate’s Banking Committee with the Active support of President Bush. This law was enacted to support and enforce corporate governance which is required to improve confidence of the investor in the company reports. Sarbanes-Oxley Act ensures that the reliability and accuracy of disclosures made by the US corporate. The Sarbanes-Oxley Act was enacted to avoid any more financial and accounting scandals which had just rocked the country.
Sarbanes-Oxley Act is also commonly called SOX or SarbOx but the official name of the Act is ‘Public Company Accounting Reform and Investor Protection Act of 2002’. It is one of the most complex pieces of legislation that affects all size of corporate alike in the matter of financial disclosures, corporate governance, and the public accounting practices.

Sarbanes-Oxley Act prevents the US corporate big or small to commit a breach of trust and financial frauds. This Act also has provision for punishing corporate which show irregularities in their reports on financial health. Once the Sarbanes-Oxley Act came into force the investor confidence got a boost as this law provides for huge personal penalties for offenders and bring them to justice all the while protecting the interest of shareholders and workers alike.
The Sarbanes-Oxley Act requires the large corporate to meet the standards financial reporting as set out in the Act and demands certification mandates form the management for all financial statements issued at year end. This Act is broadly categorized into 11 main sections but in reality only subset of these sections relate to the Sarbanes-Oxley Act compliance.

The Sarbanes-Oxley Act has established a brand new framework for corporate boards of directors and audit committees. This law provides for criminal penalties on executives of large corporate for defaulting also establishes accountability standards. Sarbanes-Oxley Act has given more independence to the external auditors to ensure the meeting of the new standards of corporate governance.