What is Section 404 of Sarbanes-Oxley?

The Sarbanes-Oxley Act requires that the management of public companies assess the effectiveness of the internal control of issuers for financial reporting. Section 404(b) requires a publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls.

Who must comply with SOX 404?

SOX 404 compliance is a necessity for all publicly-traded companies in the United States, in addition to whole-owned subsidiaries and publicly-traded foreign companies that do business in the US.

What does Section 404 of the Sarbanes-Oxley Act of 2002 require quizlet?

Section 404 of the Sarbanes-Oxley Act requires all public companies to issue a report about the operating effectiveness of internal control over financial reporting.

What are the standard requirements of SOX?

SOX requires formal data security policies, communication of data security policies, and consistent enforcement of data security policies. Companies should develop and implement a comprehensive data security strategy that protects and secures all financial data stored and utilized during normal operations.

What are SOX key controls?

SOX controls, also known as SOX 404 controls, are rules that can prevent and detect errors in a company’s financial reporting process. Internal controls are used to prevent or discover problems in organizational processes, ensuring the organization achieves its goals.

What are the SOX 404 requirements?

What Are the SOX 404 Requirements? Auditing laws cover various topics and industries from social media privacy to financial transactions. Each auditing process targets different weaknesses in order to tackle the risks that accompany technological advancements.

How can SOX 404 compliance costs be reduced?

Based on the 2007 guidance, SEC and PCAOB directed a significant reduction in costs associated with SOX 404 compliance, by focusing efforts on higher-risk areas and reducing efforts in lower-risk areas.

How do I implement SOX 404 controls in ERP?

SOX 404 controls can be implemented using a modern ERP software system. For information on testing and auditing SOX section 404 for compliance, see Sarbanes-Oxley Compliance Checklist and Sarbanes-Oxley Auditing Requirements.

What is the objective of Section 404 of the SEC code?

The objective of Section 404 is to provide meaningful disclosure to investors about the effectiveness of a company’s internal controls systems, without creating unnecessary compliance burdens or wasting shareholder resources.”