Question

What element of SOX is most surprising to you?

Answer 1

In 2002 the Sarbanes-Oxley Act was introduced with a motive to provide assurance about the completeness and accuracy on the financial reports. The primary intent of the regulation was to restore confidence of investor's and preventing the equities collapse in the markets. To me the most surprising as well as the burdensome element was Section 404 that states that it's the management responsibility for maintain an accurate internal-control structure for financial statements and to assess it's effectiveness. Furthermore it's the auditor's responsibility to attest to the effectiveness of management’s report as well as assessment on the state of the overall system of financial control. It burdened the forward-thinking group to an extent that they have little time on the development and adoption of procedures and policies that went beyond literal compliance. The smaller companies disproportionately suffered the cost of complying with SOX 404 because there of a huge fixed cost in completion of the assessment