Sunday, June 18, 2006

Formtek Blog: Sarbanes-Oxley Compliance and ECM

It’s been only four years since the Sarbanes-Oxley Act (SOX) was passed. But in many ways this one piece of legislation has already had a profound impact on the entire business community. The goal of SOX is to achieve greater transparency and accountability in financial reporting, and in doing so, provide a way to more closely scrutinize public coporations from the outside. Stiff fines, penalties and the threat of litigation have been strong motivators to get companies to comply. But many or maybe even most companies still have a long way to go.

Part of the reluctance or difficulty with SOX is just coming to grips with what it all means. SOX does not clearly spell out in black and white the steps for achieving compliance. It was intended to provide overall guidance, but it is very broad and lengthy, consisting of 11 parts and 66 sections. The language in SOX was written in very general terms to spell out requirements that apply to all public companies, and the interpretation and the methods by which SOX compliance are achieved is still evolving.

Formtek Blog: Sarbanes-Oxley Compliance and ECM

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