What is the Sarbanes-Oxley (SOX) Act?
In 2002 after the wake of the Enron and World Com Financial scandals Senator Paul Sarbanes and Representative Michael Oxley lead the creation of the Sarbanes-Oxley Act. This act administered by the Securities and Exchange Commission (SEC) dramatically altered corporate financial practices and data governance. In addition, it also set specific deadlines for compliance. The Sarbanes-Oxley is not a set of standard business rules and does not specify how a company should retain its records; In fact, this act outlines which pieces of data are to be stored as well as the storage duration.
The SOX act targets the financial side of companies, but its impacts can be seen within the technology arena as well because it is their responsibility to store all of a company’s electronic records regardless of file type. This act specifies that all records and electronic messages must be saved for no less than five years according to SearchCIO. In addition, consequences for non-compliance are fines, imprisonment, or both.
Sarbanes-Oxley Act: Rules that affect the management of Electronic records according to SearchCIO.
Allowed practices regarding destruction, alteration, or falsification of records.
Retention period for records storage.
Best practices indicate that corporations securely store all business records using the same guidelines set for public accountants.
Types of business records that need to be stored
Business Records
Business Communications
Including Electronic Communications
References:
SOXLaw: The Sarbanes-Oxley Act 2002 Retrieved May 2011 from http://www.soxlaw.com/
SearchCIO: What is Sarbanes-Oxley Act (SOX)? Retrieved May 2011 from http://searchcio.techtarget.com/definition/Sarbanes-Oxley-Act
