Analysing some issues with SOX. (1st January 2013)

• Record Type: Journal Article
• Authors: Sy, Aida
• Is Part Of: International journal of auditing technology. Volume 1:Number 1(2013)
• Page Start: 18
• Page End: 25
• Publication Date: 2013-01-01
• Subjects: SOX 2002 -- auditing -- accounting profession -- issues in regulation -- corporations; Information storage and retrieval systems -- Accounting -- Periodicals; Computer security -- Management -- Periodicals; Information technology -- Auditing -- Periodicals; 657.450285
• Languages: English
• ISSNs: 1757-8752

Abstract

The Sarbanes-Oxley Act legislation (the SOX) was triggered by a series of market failures that were exemplified by the bankruptcy of Enron, whose accounting errors inflated earning by almost $600 million since 1994. With assets of $62 billion, Enron was the largest bankruptcy case in US history. The Enron collapse was dwarfed several months later by the massive fraud and bankruptcy filing of WorldCom in July 2002, with $100 billion in assets. The changes in internal control required by SOX's executive arm – the Public Company Accounting Oversight Board (PCAOB) – imposed costs, that have given rise to appeals to rollback or repeal the requirements (for small firms, overseas firms, etc). One emerging technology – analytic monitoring – offers a possible answer to this impasse. It tenders a family of solutions that are potentially cheaper and more effective than traditional systems of control.