ABSTRACT
The Sarbanes—Oxley Act of 2002, which is often referred to as SOX or S-OX, is a law passed in the United States in response to the corporate and accounting scandals primarily involving Enron and WorldCom. It also influenced by the problems at Adelphia, Tyco, Qwest Communications, Global Crossing, ImClone, Waste Management, Computer Associates, Xerox, and other companies. The name Sarbanes—Oxley refers to the names of the two congressmen, Senator Paul Sarbanes and Representative Michael Oxley who co-sponsored the act. The most popular provision of Sarbanes—Oxley involving internal auditors is the work related to Section 404: Management Assessment of Internal Controls. The Sarbanes Oxley Act of 2002 was passed to address the massive financial breakdowns of companies like WorldCom and Enron, that cost investors billions of dollars. Many internal auditors are assigned testing procedures related to SOX compliance reviews early in their careers because they provide an effective introduction to risk assessment, testing, and documentation.
