SOX Reforms Corporate America

SOX Reforms Corporate America The Sarbanes-Oxley Act of 2002 (SOX) enacted July 30, 2002 introduced significant changes to financial practice and corporate management regulation. Passed in the wake of numerous scandals SOX is a complex piece of legislation that requires companies to make major changes to bring their organizations into compliance (Bumgardner 2). Many believe this act has not proven worthy and will not change effect in the business world, but I think this act will help businesses and outside investing. The act holds top executives personally responsible for the accuracy and timelines of their company’s financial data — under threat of criminal prosecution. Sox address weaknesses with internal issues, requiring yearly…show more content…
Section 409 of the SOX Act has been interpreted as meaning that when a material financial change occurs in a publicly held company, it must be reported to regulators within 48 hours (Addison-Hewitt Section 409). Disclosures are to be presented in terms that are easy to understand with the use of graphics where necessary. These easy to follow graphics and disclosure protect investors in real time from delayed reporting of material events. “Companies must also account for changes that occur externally, such as changes by customers or business partners that could materially impact its own financial positioning (e.g. key customer/supplier bankruptcy and default)” (Brief Summary 4). The company will use technologies to help identify and route issues and requirements to the investors and other relevant…show more content…
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