Sarbanes Oxley Act, commonly known as SOX or SarbOx, is one important piece of legislation passed by the US House of Representatives and Senate in 2002.The law affects governments, financial disclosure and the general practice of public accounting. It sets new standards of responsibility and criminal penalties for corporate management.
The amount of money a company spends accordance with the Sox law depends on the extent of the procedure organization and technology. Experts complain that it is difficult to estimate the total cost. The 2004 statistics show that the typical company spends $ 4.6 million in the 2004 Sarbanes Oxley, plus an additional 38 percent for future audits.
Sarbanes Oxley law imposes costly compliance burden on small and mid-size companies. Act audits and accounting very expensive. The requirement Sox have about twice the cost of audits, which is usually around 2.5 percent or more of their annual income small business. Large companies can afford such high costs, but they are much more difficult for a small company to digest. This affects them negatively in the development and flourishing. While Sox have made problems, it has also created opportunities.
It is recommended that companies use compliance project to streamline their processes with the help of business process reengineering efforts. There are many services that help you assess the typical cost of complying with the Sarbanes Oxley Act in the United States. Most of them offer a good standard calculation sheet on their site, which you can use to work out your own cost of SOX compliance. You can also buy a table at a small charge.