The Sarbanes-Oxley Act was passed at the One Hundred and Seventh Congress of the United States of America in January, 2002. It purports to be an act to "Protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes".

While this is an American Act, it applies to every corporation listed on a United States Stock Exchange, or to ANY non-US corporation that meets the criteria as a Foreign Private Issuer, or to any entity which solicits funds for investment in the USA (see Chapter 1 "Definitions"). Further, other countries including the UK and Canada are introducing similar legislation to govern corporations operating domestically. In general, Europe seems to favour a "principles" based system as opposed the US "rules" based approach.

It is, therefore, appropriate and probably necessary for most corporations to comply with Sarbanes-Oxley requirements in order to avoid future problems with the governing bodies. Non-public companies contemplating an IPO or anticipating an acquisition/merger situation can also benefit from implementing the system since it will make them a much more attractive proposition and greatly reduce compliance difficulties later.

While the costs of implementing an Internal Control System to meet the SOX requirements can be considerable, it isn't by any means money wasted. The improved efficiencies and information gathering will benefit most companies by providing useful risk management, employee accountability, performance management and communications at the very least.

This book summarizes the Act and provides a simplified guide to...