The major corporate scandals in the USA in the early 2000s gave rise to the Sarbanes-Oxley Act (SOX), which targets to prevent
misconduct and improve corporate governance practices.
Sarbanes-Oxley
compliance refers to compliance with the Public Company Accounting Reform and Investor Protection Act of 2002, also known as Sarbanes-Oxley.
Sponsored by Senator Paul Sarbanes of Maryland and Representative Michael Oxley of Ohio, the Act was a response to an excess of corporate fraud scandals, such as the Enron case.
Sarbanes-Oxley compliance requires that
financial institutions carefully document and disclose their internal controls, the ethics codes that employees are subject to, and audit committee reports.
Sarbanes-Oxley is a rather complicated act that attempts to prevent corporate fraud.
To that end, Sarbanes-Oxley compliance requires attention to many different clauses in the Act.