What does the Sarbanes-Oxley Act (SOX) require from publicly traded U.S. corporations?

The Sarbanes-Oxley Act (SOX) primarily aims to enhance corporate governance and accountability within publicly traded companies. One of its key requirements is to ensure that these corporations comply with stricter standards for accounting methods and financial reporting. This compliance is critical to prevent financial fraud and misrepresentation, ensuring that investors and stakeholders receive accurate and reliable financial information.

SOX mandates that companies establish internal controls and procedures for financial reporting, which must be audited and verified. The act was enacted in response to several accounting scandals in the early 2000s, emphasizing the need for transparency and integrity in financial practices. By enforcing these requirements, SOX helps protect investors and the overall integrity of the securities market.

While improving employee training, funding for cybersecurity, and implementing biometric security measures can be important aspects of corporate governance, they are not specific mandates of the Sarbanes-Oxley Act. The focus of SOX is squarely on financial accountability and transparency rather than on these other security or training measures.