Definition
The Sarbanes-Oxley Act (SOX) is a United States federal law enacted in 2002 to protect investors from fraudulent accounting practices by public companies. It establishes new or enhanced standards for all U.S. public company boards, management, and public accounting firms, aiming to improve corporate governance and financial reporting accuracy. SOX compliance requires organizations to implement and maintain robust internal controls over financial reporting, ensuring data integrity and security. This means establishing clear policies, procedures, and audit trails for financial data and related systems. Understanding SOX is crucial for IT professionals involved in system design, security, and auditing, as it dictates specific requirements for data protection and access controls. For example, a public company must ensure that financial systems are protected against unauthorized access and data alteration, with logs of all changes. While often discussed alongside general data privacy regulations like GDPR, SOX specifically targets financial reporting integrity and internal controls for public companies. This topic is frequently covered in cybersecurity certifications such as Security+ and CISSP, and is relevant to IT governance and compliance domains.