Sarbanes-Oxley Act Article Analysis

Sarbanes-Oxley Act Article Analysis Essay example
Finance & Accounting
Pages 3 (753 words)
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The Sarbanes-Oxley Act (SOX) Name Course Institution Introduction This Act is a set of rules commissioned by the Illinois Supreme Court in into federal law in 2002 to regulate corporations following the collapse of mega corporate in the U.S. due to fraud leading to loss of public funds and shutting down of the affected firms (Holt, 2008).


Section 404 demands that a corporation assess and report to the SEC its internal control’s effectiveness with the review and judgment by an external auditing firm. In assisting in implementation of SOX, the Act creates the Public Company Accounting Oversight Board (PCAOB) that supervises the assessment of corporate audits with compliance to SOX. The PCAOB knows the risks of having poor security controls therefore created the Committee of Sponsoring Organizations (COSO) that provides a structure of ready guidelines for implementation of internal controls (Holt, 2008). However, COSO is unable to give accurate guidelines for operations control. It is the duty of the Control Objectives for Information and related Technology (COBIT) to assist COSO in that aspect by providing safer, acceptable and up-to-date information control mechanisms. COBIT addresses information technology in all its component domains with the assistance of the Information Technology Institute (ITGI) that directly deals with the corporate in handling specific domains. To enable it to cater for more specific control of information systems, ITGI divides security into further branches namely: security policies and standards, access and authentication, network security, monitoring, segregation of duties and physical security (Holt, 2008). ...
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