SOX compliance refers to the annual obligation derived from the Sarbanes-Oxley Act (SOX) that requires publicly traded companies doing business in the U.S. to establish financial reporting standards. The act demands internal controls for financial records and requires the CEO and CFO to sign statements attesting to the accuracy of financial reports. The act also increases fines and criminal sentences for fraudulent reporting, with the goal of improving corporate governance and accountability. The details of SOX compliance are complex, and the general requirements are geared towards ensuring that companies are transparent when it comes to financial reporting and that there are more official rules in place to prevent fraud.

Some key features of SOX compliance include:

• Annual audits: Public companies are required to undergo annual audits to show evidence of accurate, secured financial reporting.
• Internal controls: Companies must establish internal controls for financial records and ensure that they are accurate and protected against loss.
• Improved corporate governance: SOX compliance improves corporate governance through the greater regulation of audit committees, which are required to be independent of management and contain at least one financial expert.

Adhering to SOX compliance requirements is not only the law, but it is also best practice for a more ethical and secure operation. Implementing SOX financial security controls, aside from being the right thing to do, also has the added benefit of helping to defend against data security threats and attacks. SOX compliance benefits all publicly-listed companies by communicating a baseline level of financial assurance, promoting investor confidence, stakeholder trust, and market certainty.

In summary, SOX compliance is a set of regulations that publicly traded companies must follow to establish financial reporting standards, internal controls, and improve corporate governance. It is an annual obligation that requires companies to undergo audits to show evidence of accurate, secured financial reporting. Adhering to SOX compliance requirements is not only the law, but it is also best practice for a more ethical and secure operation.