The Sarbanes-Oxley Act (SOX)

The Sarbanes-Oxley Act (SOX) is a U.S. law enacted in 2002 to improve the accuracy and reliability of corporate financial reporting. It was created in response to major accounting scandals, like Enron and WorldCom. SOX requires public companies to implement strict internal controls, maintain transparent records, and have their financial statements audited independently. Its goal is to increase accountability, prevent fraud, and protect investors by ensuring that companies provide truthful and accurate financial information. Overall, SOX establishes higher standards for corporate governance and accountability in financial practices.