Sarbanes-Oxley (SOX)
Also known as: SOX 302 · SOX 404 · Sarbanes Oxley
DEFINITION
The Sarbanes-Oxley Act of 2002 was passed in response to Enron and WorldCom. Key provisions: Section 302 requires CEO and CFO to personally certify the accuracy of periodic reports; Section 404 requires management's assessment of internal controls over financial reporting (ICFR) and, for large filers, an independent auditor attestation; Section 906 imposes criminal penalties for knowingly false certifications.
WHY IT MATTERS FOR RETAIL INVESTORS
SOX is why every 10-K and 10-Q has CEO/CFO signature pages and an ICFR audit. When a company discloses a SOX 404 material weakness, it is essentially admitting its financial reporting cannot be fully relied upon — a strong red flag. Track Item 9A (Controls and Procedures) in any 10-K you read; a clean SOX certification is table stakes, but a qualified one tells you something is wrong.
OFFICIAL SEC SOURCE
https://www.sec.gov/about/laws/soa2002.pdf ↗RELATED TERMS
See Sarbanes-Oxley (SOX) in a real filing
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