The Sarbanes-Oxley legislation of 2002 (SOX) was borne out of abuses by corporations, their lawyers, and their auditors during the wild business environment of the late 1990s. It was clear in many cases before SOX that corporate CEOs, CFOs, and/or boards of directors in concert or alone were not only not minding the store but were more or less cooking the books. Corporate governance in many corporations was either non-existent or simply ignored.

What is SOX? Corporate governance sums up SOX. SOX is a comprehensive law that first established a Public Company Accounting Oversight Board (Board) under the auspices of the U.S. Securities and Exchange Commission (SEC).The Board registers auditing firms and makes and adopts rules related to independence, quality control, and other auditing report standards. Additionally, the Board conducts inspections of audit firms and audits, investigates, disciplines, and imposes sanctions where appropriate. It also enforces SOX compliance, professional standards, and securities laws among other responsibilities.