Sarbanes Oxley - overview

Topics: Enron, Internal control, Sarbanes–Oxley Act Pages: 2 (401 words) Published: May 5, 2014
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Sarbanes Oxley
The Sarbanes–Oxley Act of 2002also known as the 'Public Company Accounting Reform and Investor Protection Act and Corporate and Auditing Accountability and Responsibility Act and more commonly called Sarbanes Oxley, Sarbox or SOX, is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It is named after sponsors U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. The Sarbanes-Oxley Act of 2002, often shortened to SOX, is legislation enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. The act is administered by the Securities and Exchange Commission (SEC), which sets deadlines for compliance and publishes rules on requirements. Sarbanes-Oxley is not a set of business practices and does not specify how a business should store records; rather, it defines which records are to be stored and for how long. The legislation not only affects the financial side of corporations, it also affects the IT departments whose job it is to store a corporation's electronic records. The Sarbanes-Oxley Act states that all business records, including electronic records and electronic messages, must be saved for no less than 5 years. The consequences for non-compliance are fines, imprisonment, or both. IT departments are increasingly faced with the challenge of creating and maintaining a corporate records archive in a cost-effective fashion that satisfies the requirements put forth by the legislation.

The follow-up to the New York Times' blockbuster scoop on Wal-Mart's alleged cover-up of $24 million in Mexican bribes has, quite rightly, focused on the company's potential Foreign Corrupt Practices Act exposure. But that's not the only law Wal-Mart and its executives should be worrying about. Sarbanes Oxley was...
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