SOX

The Sarbanes-Oxley Act of 2002 was introduced following significant corporate scandals such as Enron and WorldCom, which undermined public confidence in U.S. capital markets. The law focuses on enforcing transparency and integrity in public company financial reporting through various provisions, including enhanced responsibilities for corporate executives, independent audit committees, and stronger internal controls over financial reporting. Key sections include Section 302, requiring executive certification of financial reports, and Section 404, mandating management assessments of internal control effectiveness. The Act also established the Public Company Accounting Oversight Board (PCAOB) to regulate audit practices. SOX has become fundamental for U.S.-listed companies and indirectly influences global corporate governance.