The Effect of SOX on FAO: What the Outsourcing Contract Needs to Say, FAO Today
Although F&A outsourcing can help organizations better focus on Sarbanes-Oxley rules, they are ultimately responsible for all aspects of compliance.
The Sarbanes-Oxley Act (also known as SOX), which became law on July 30, 2002, was passed in response to the corporate reporting scandals that led to the collapse of a number of U.S. companies in late 2001. One result of the scandals was an erosion of investor confidence in the information contained in reports and documentation that publicly traded companies filed with the U.S. Securities and Exchange Commission (SEC). In response, Congress enacted SOX with the primary goal of restoring investor confidence. With this goal in mind, SOX imposes a number of requirements that affect corporate governance, financial disclosure, and total accounting patterns of public companies.