185-9 Sarbanes-Oxley Act of 2002

Summary

The Sarbanes-Oxley Act of 2002 (SOX) is a U.S. law designed to protect investors from fraudulent financial reporting by corporations, following major scandals like Enron and WorldCom. It mandates that companies provide annual reports on the effectiveness of their internal controls over financial reporting, including management assessments and independent auditor attestations. Companies must disclose all material off-balance sheet transactions and relationships that impact financial conditions and promptly disclose material changes in their financial condition or operations. CEOs and CFOs are required to certify the accuracy of financial statements and disclosures, ensuring no misleading statements or omissions. Additionally, management and auditors must report on internal controls and procedures for financial reporting, ensuring reliability and compliance. These measures aim to increase transparency, improve financial reporting accuracy, and restore investor confidence.

Thumbnail image for The Sarbanes-Oxley Act of 2002 (SOX) is a U.S. law designed to protect investors from fraudulent financial reporting by corporations, following major scandals like Enron and WorldCom. It mandates that companies provide annual reports on the effectiveness of their internal controls over financial reporting, including management assessments and independent auditor attestations. Companies must disclose all material off-balance sheet transactions and relationships that impact financial conditions and promptly disclose material changes in their financial condition or operations. CEOs and CFOs are required to certify the accuracy of financial statements and disclosures, ensuring no misleading statements or omissions. Additionally, management and auditors must report on internal controls and procedures for financial reporting, ensuring reliability and compliance. These measures aim to increase transparency, improve financial reporting accuracy, and restore investor confidence.

Issuer

United States

Year

2002

Region

North America

Policy Type

Other sustainability policy

Geographical scope

National

Mandatory or voluntary

Mandatory

Main industries targeted

Finance & Insurance
Retail trade
Professional, Scientific, & Technical Services
Public administration

Restrictiveness

Moderate

Sustainable Development Goals (SDGs)

SDG 5: Gender Equality
SDG 10: Reduced Inequality
SDG 11: Sustainable Cities and Communities
SDG 15: Life on Land
SDG 16: Peace, Justice, and Strong Institutions