The Sarbanes-Oxley Act (SOX) was passed in 2002 following accounting scandals at companies such as Enron and WorldCom. The act requires publicly traded companies in the United States to establish and maintain internal controls to ensure the accuracy and reliability of financial reporting. Companies that fail to comply with SOX may face significant fines and criminal charges for executives.
To begin, it's important for companies to understand the requirements of SOX, particularly Section 404, which mandates that they establish and maintain sufficient internal controls over financial reporting. This includes implementing controls that ensure financial statements are accurate and assets are protected. Additionally, companies must have an independent auditor evaluate the effectiveness of their internal controls.
To meet these requirements, companies should perform a comprehensive risk assessment to identify areas of the organization that pose the greatest risk to financial reporting. Based on the results of the risk assessment, they should create and implement a system of internal controls designed to mitigate those risks. Companies should also implement processes to regularly monitor and test the effectiveness of their controls.
Darksteel Technologies offers a comprehensive suite of compliance solutions to help companies achieve compliance with SOX and other regulatory requirements. Our SOX compliance solution includes risk assessment, control design and implementation, monitoring and testing, and independent audit support. Our experienced team can help companies create and implement an effective system of internal controls.
In addition to SOX compliance, Darksteel Technologies provides compliance solutions for data privacy, cybersecurity, and other regulatory requirements across various industries. Our experts have a deep understanding of the regulatory landscape and can assist companies in navigating complex compliance requirements.