The basic requirements of SOX are:
• Requires all financial reports to include internal controls
• SOX auditors are required to review controls, policies, and
procedures
• Encourages whistleblowers
• CEO/CFO signatures on all financial reports, controls, policies,
and procedures
• Jail time for anyone intentionally destroying, altering, or falsifying
documents meant for auditing, investigation, or bankruptcy
• Auditing firms can not provide any other services to their auditing
clients
• A company’s workforce, salaries, benefits, incentives, PTO, and
training cost must be accounted for to include code of ethics,
communication, and training.
A SOX criticism is the impact on small businesses. Not only do small
companies have to follow the same rules and regulations as a large
company they must pay the same price. The SOX act does not take into
consideration the size or the resources available to a company. The
resource most discussed is auditing fees. Prior to SOX a company, no
matter the size, could pay one company for auditing and other
consulting services. Now the auditing company can not act as a
consultant as well leaving business having to pay two separate
companies. Between the cost of auditing services increasing to ensure
SOX compliance and having to pay another company for consulting it
leaves smaller companies struggling.
https://www.soxlaw.com/the-pros-and-cons-of-the-sarbanes-oxley-
act
