What is the purpose of the Sarbanes-Oxley Act, and which businesses are impacted by it?
First of all – who is impacted by SOX (Sarbanes-Oxley Act)? Any company that is publicly held – a company that has shares to buy on any American Stock Exchange. If you are a sole proprietor, a partnership, an LLC, you don’t need to legally comply – but many of the ideas behind the Act are just good business practices. Any foreign-based company that sells on the any American Stock Exchange also has to follow the SOX act, though they had a little more time to get their testing in place. After the Enron, World Com, Arthur Andersen messes, etc., the government stepped in to protect the investors – and especially protect the employee’s pension funds. They didn’t want to see a group like the out-of-work Enron employees that didn’t even have a pension left. So – in their wisdom, they came up with the SOX Act. What is required by this act is a series of self-tests that make sure that all the ‘I’s are dotted and the “T’s crossed in a legal way that follows the GAAP (Generally Accepted Accountin
