Overview
SARBANES-OXLEY ACT OF 2002 (SOX)
In response to corporate financial scandals in the early 2000s, Congress passed the Sarbanes-Oxley Act of 2002 to help protect shareholders and the public from fraudulent financial reporting by corporations. It mandated new rules for accountants, auditors, and corporate officers, including strict requirements to ensure financial data is accurate and protected against loss.
Section 404 of SOX (SOX 404) requires the independent auditor of a corporation to opine on the effectiveness of internal control over financial reporting, in addition to the fair presentation of the financial statements. It draws attention to processes that feed the financial
results and requires corporations to document and evaluate controls that are deemed significant to the financial reporting process. With
this, an increased need for internal control examinations.
