What Is SOX 404 Compliance?

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In order for a business to attain SOX 404 compliance, it is necessary to establish business-reporting practices in line with section 404 of the Sarbanes-Oxley Act. The Sarbanes-Oxley Act is a set of internal control reporting provisions designed by the Securities and Exchange Commission.

Purpose of SOX

The Sarbanes-Oxley Act was established by the SEC to protect investors from corporate mismanagement leading to fiscal injury.

SOX 404 Compliance Requirements

Section 404 states that public companies must include an in-house assessment of their internal control over financial reporting with their annual report. This report must be accompanied by the attestation of an auditor.

Benefits of SOX 404 Compliance

Companies with SOX 404 compliance are often viewed as safer investments due to their demonstrated commitment to fiscal transparency.