SOX Compliance Management Software
Publicly held companies in the U.S. are subject to a wide variety of regulations for financial control management. Among the most important of these is the Sarbanes-Oxley Act of 2002, which is intended to protect the rights of investors by requiring public organizations to report accurate financial data. The Act is enforced by the U.S. Securities and Exchange Commission (SEC).
Since the passage of the Sarbanes-Oxley Act—or SOX, as it is commonly known—compliance with this law has been an inescapable part of doing business for publicly traded businesses. For many companies, it has also become an increasingly unmanageable burden. Fortunately, Aruvio has developed first-rate GRC solutions that include tools to promote SOX compliance. First, though, it is important to understand the nature of the Sarbanes-Oxley Act.
The History of SOX
The Sarbanes-Oxley Act was passed by the U.S. Congress as a corrective response to several high-profile accounting scandals that made national headlines. The most notorious of these was the infamous Enron fraud, where this once-respected energy company was found to have grossly inflated and even outright fabricated its company assets. The passage of SOX was intended to prevent the recurrence of this type of corporate fraud. It does this by requiring businesses to comply with various accounting and disclosure tasks, with the goal of promoting financial transparency.
SOX Compliance Requirements
The Act includes a number of provisions (the full text is 66 pages long), but there are a few of particular relevance to a company’s IT department:
- Section 302: Corporate Responsibility for Financial Reports. This requires financial reports to be certified by the company’s CEO and CFO.
- Section 404: Management Assessment of Internal Controls. This requires companies to monitor internal controls pertaining to its accounting practices.
- Section 409: Real-Time Issuer Disclosures. This requires companies to disclose immediately any alternations in their financial operations.
- Section 802: Criminal Penalties for Altering Documents. This requires companies to preserve financial records without alteration for at least five years.
Violating any of these regulations will expose a company to substantial civil and/or criminal penalties, including potential fines in the millions of dollars and lengthy prison sentences for negligent executives.
SOX applies to all publicly traded U.S. companies, as well as all international companies with securities registered with the SEC. In addition, accounting firms that provide services to a company of either type must adhere to the Act.
Aruvio's SOX Compliance Solution
It is vastly important for companies to remain fully compliant with these rules at all times. By using Aruvio’s state-of-the-art GRC platform, companies have access to a number of useful SOX controls that enable them to manage and preserve important financial records by improving internal financial controls.
Please contact us for a FREE demo or more information about the SOX compliance solutions available through Aruvio.