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Sarbarnes-Oxley Act (SOX)

The Sarbanes-Oxley Act of 2002 (SOX) is a federal law passed by the United States Congress. The act is designed to protect investors from corporations with fraudulent financial reports. It was put in place in response to Enron and similar scandals of the 2000s. The law requires stricter record-keeping and penalties for lawbreakers. In addition, corporate whistleblowers receive protection when reporting illegal activities.

What Small and Midsize Businesses Need to Know About Sarbarnes-Oxley Act (SOX)

SOX applies to publicly-traded companies of any size. Most corporations have systems to ensure their reports and audits remain compliant. SMBs, however, are often lacking in accountants and auditors. In any case, organizations must ensure annual reports and assessment audits are correct. Non-compliant companies could face stock exchange removal, hefty fines, and jail time.

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