1.
Identify and describe SOX, using the characteristics of useful information.
Solution
The Meaning of SOX is Sarbane-oxley Act. It was passed in year 2002. It is the legislation
passed by US Congress to protect shareholders and general public from accounting errors and
fradulent practices in the enterprises as well as improve the accuracy of corporate disclosure.It is
mandatory to all corporations which is listed. SOX was enacted after some corporate scandals
happened by big Corporations like Erron,Tyco and world com.
The Two key provision of the sarbane-oxley act. This is as follow:
(1) Sec-302: It is mandatory for senior management to certify the accuracy of the reported
financial statements.
(2) Sec- 404 : This section say that corporations must establish internal control systems and
reporting methods on the adeqacy of those controls with the help of Auditors and management.