The Sarbanes-Oxley Act (SOX) is a 2002 US federal law passed after Enron and WorldCom accounting scandals, dramatically strengthening corporate governance and financial reporting. Key provisions: CEO/CFO personal certification of financial statements (Section 302), independent audit committees, internal control documentation and audit (Section 404), enhanced disclosure requirements, whistleblower protections, criminal penalties for fraud. SOX compliance costs public companies millions annually but materially improved financial statement reliability. Compliance burden led some companies to go private or stay private longer. The PCAOB (Public Company Accounting Oversight Board) was created by SOX to oversee public-company auditors.
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Accounts Payable
Accounts Payable (A/P) is money a company owes to suppliers for goods or services received but not yet…
Accounts Receivable
Accounts Receivable (A/R) is money owed to a company by customers for goods or services delivered on credit.…
Accrual Accounting
Accrual accounting recognizes revenues when earned (regardless of cash receipt) and expenses when incurred (regardless of cash payment)…
Accrued Expense
An accrued expense is a cost recognized in the income statement before cash is paid — recorded as…
Amortization
Amortization is the systematic allocation of intangible asset cost over its useful life — analogous to depreciation but…
Audit
An audit is an independent examination of a company's financial records, internal controls, and statements — typically conducted…
Sarbanes-Oxley Act
August 22, 2026 · Aditya Gupta
Accounting
Related terms
Accounts Payable
Accounts Payable (A/P) is money a company owes to suppliers for goods or services received but not yet…
Accounts Receivable
Accounts Receivable (A/R) is money owed to a company by customers for goods or services delivered on credit.…
Accrual Accounting
Accrual accounting recognizes revenues when earned (regardless of cash receipt) and expenses when incurred (regardless of cash payment)…
Accrued Expense
An accrued expense is a cost recognized in the income statement before cash is paid — recorded as…
Amortization
Amortization is the systematic allocation of intangible asset cost over its useful life — analogous to depreciation but…
Audit
An audit is an independent examination of a company's financial records, internal controls, and statements — typically conducted…
