SOX required standards

SOX required standards

Introduction

Sarbanes-Oxley o SOX, The Sarbanes-Oxley or SOX, is the important regulation that emerged after U.S. financial scandals in products in 2001 bankruptcy, fraud and other inappropriate administrative dealings that undermined the confidence of investors on the financial information issued by companies.

SOX is a law that improves the procedures for demonstrations and corporate control, the various titles and sections of SOX defines the responsibilities of management in annual and semiannual reports, the control environment, risk management and monitoring and measuring control activities.

The main objectives of the Act are:

Improve the internal control structure, financial and nonfinancial

Improve operational and financial processes;

Reaching a new level of corporate governance;

Greater credibility in the marketplace, depending on the fight against financial fraud.

Thus, in July 2002, the U.S. government States passed the Sarbanes-Oxley, as mechanism to tighten controls a company and return the lost trust, too .because of fraud. (Enron, WorldCom). The legal text topics such as corporate governance, accountability of administrators, transparency, and other important limitations to the work of auditors were covered. (Susan P& Cohen, 2010)

Discussion

SOX is the response of the U.S. government to various financial scandals that occurred in large enterprises SOX is composed of 11 titles, and is a law requiring compliance with certain rigid requirements to company accounts, besides that transforms the public accounting industry.

Who should apply?

It applies to all companies that are recorded in the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automatic Quotation by known NASDAQ, under the supervision of the Securities and Exchange Commission (SEC). Therefore, also applies to all foreign companies listed in these stock exchanges, including the house parent, subsidiaries and affiliates.

What governs?

SOX contains 11 sections and numerous laws regulating different aspects and involving executives business, directory, corporate governance, committees auditing, securities dealers, brokers, rating risk and audit firms, among others. The first thing SOX is to create the "Public Company Accounting Oversight Board Accounting Oversight Board, better known as the PCAOB, which the Supervisory Board of Public Accounting Firms which began operations in April 2003. Its main function is keep track of auditing firms to inspect their work and verify they meet the standards and quality control. The PCAOB can impose sanctions and measures discipline.

A SOCK addresses the issue of independence auditors. Among other things, limit the services that these firms can provide to their audit clients and ...