SOX - Reporting Requirements to Protect Against Corporate Fraud
The Sarbanes-Oxley Act sets internal reporting requirements to protect investors and the general public from corporate fraud. Find out what this means for your business.
What is the Sarbanes-Oxley Act (SOX)?
SOX affects all publicly traded companies and public accounting firms, but any private companies with the potential to go public also need to understand and comply with the act’s requirements. Let Access help.
Records Destruction
While documents that have surpassed their retention requirements can be securely destroyed and disposed of, SOX requires that the records management program include a legal hold process to suspend this procedure. This means that the destruction process must cease immediately upon notification of legal action, or upon the anticipation of any foreseeable litigation.
Safeguards Developed
The Sarbanes-Oxley Act was developed to safeguard the financial records of public corporations and accounting firms, in order to protect the company’s shareholders and the general public. The safeguards are designed to prevent accounting errors and fraudulent practices, as well as to improve corporate disclosures. For instance, SOX makes it a federal crime to destroy or tamper with any corporate accounting records.While the act concentrates on the documentation, control processes and retention of financial data, all information and records that support financial statements must be accurately documented and available for review by auditors.
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