What is Sarbanes-Oxley Act (SOX Compliance)?

Sarbanes-Oxley Act (SOX) compliance refers to the adherence to a set of legal and regulatory standards established by the U.S. government to enhance the accuracy and transparency of financial reporting by publicly traded companies. SOX compliance requires organizations to implement internal controls, financial reporting processes, and auditing practices to prevent corporate fraud, ensure data accuracy, and protect the interests of shareholders and the public. Compliance with SOX is mandatory for publicly traded companies and includes requirements for financial disclosures, audit committees, and internal control assessments.