For this assignment I am going to try to describe the cost and benefits of implementing the Sarbanes Oxley Act (SOX) for a company. I will then move on to describe what it is, how to go about it, and what a company may need to properly implement it. The Sarbanes Oxley Act was approved and activated in 2002 to protect investors and to renew confidence in American companies from what happened with the fall of companies like Enron, HealthSouth, and WorldCom. This act was trusted to fix or find corruption in the companies and make them liable for their unethical activities. Although this act has proven to have many benefits, the cost of complying with the act for some companies has been much greater than expected. There are also negative…show more content… There are eleven different titles arranged in the Sarbanes Oxley Act. Where compliance is considered, the most important sections to look at are 302, 401, 404, 409, 802, and 906. However of all these the most controversial section of the Sarbanes Oxley Act is section 404. Section 404 focus is on the internal financial controls with the information that is used to produce the financial statements and to make them more reliable. There are seven ways to accomplish this and they are as followed:
A committee to review procedures and processes
Certifications – where lower level employees certify the correctness of the information they sent up
Coordination - Who is to be the person anyone in the organization can go to with a question? And, who tries to keep everyone on the same page?
Codes of conduct for all employees
Consulting – internal auditors and outside vendors
Making a time and responsibility chart (Bowser, Merkel, Lovik, n.d., page 5-6).
The SOX Act is administered by the Securities and Exchange Commission (SEC), which sets the deadlines for compliance and publishes rules on the requirements. Therefore the Sarbanes Oxley Act is not a set of business practices and does not specify how a business should store their records. However the Act does define which records are to be store and for how long.
Cost of the