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Sarbanes and Oxley, whose pictures appear in Figure 4-2, both retired from

public life in 2007.

Breaking Down SOX to the Basics................................................................

SOX aims to restore investor confidence and enhance corporate governance

by using a series of internal checks and balances. The goal is to ensure trans-

parent financial reporting. SOX consists of 11 titles and 65 sections. Instead of

quoting you the full letter of the law, we have selected a specific group of

important sections related to compliance to give you an overview.

Sections 302 and 906: Threatening

management with a big stick

SOX seeks to prevent the kinds of failures of leadership that happened at com-

panies such as Enron, and much of the law is aimed at corporate managers and

Figure 4-2:

The

infamous

Sarbanes

and Oxley.

Chapter 4: How Sarbanes and Oxley Changed Our Lives 93

Alphabet soup: Your handy guide

to SOX terminology

Here are some of the many acronyms you’ll

hear tossed around when discussing SOX, and

what they stand for:

COBIT:Control Objectives for Information

and Related Technology

COSO:Committee of Sponsoring Organiza-

tions of the Treadway Commission

FASB: Financial Accounting Standards

Board

GAAP: Generally accepted accounting

principles

IFRS: International Financial Reporting

Standards

ITIL:Information Technology Infrastructure

Library

PCAOB:Public Company Accounting Over-

sight Board

SEC:Securities and Exchange Commission