What is SOX or Sarbanes-Oxley Act?
SOX, or the Sarbanes-Oxley Act, was enacted by Congress in 2002 to help provide better security for the general public and consumers. It was structured to improve corporate governance and accountability and to better shield the public from malicious or unintentional misuse of financial data. Remember those well-publicized and substantial financial scandals pre-2002? Well, SOX was first introduced in part, in response to those.
The creation of SOX compliance requirements helps ensure there is transparency in a company’s financial reporting and that there are official checks, balances, and controls in place to prevent fraud. As a bonus of implementing SOX controls on financial reporting for accuracy and transparency, organizations that adhere to SOX security control guidelines, whether required by law or implemented as best practice, benefit from a stronger stance against data security threats.
Who Has to Comply with SOX Requirements?
Public companies are required by law to adhere to SOX compliance requirements, and they must also undergo an annual audit to remain compliant. The Act sets responsibilities for officers and boards of public companies and other entities who must comply, with large financial repercussions and criminal penalties (including potential prison terms) applied for failure to comply.
In addition to publicly traded companies doing business in the United States, SOX compliance also applies to wholly owned subsidiaries as well as any foreign companies doing business in the United States or with stocks and securities registered with the Securities and Exchange Commission (SEC). Accounting firms that conduct SOX audits must also comply, as well as some companies that operate in certain financial reporting arenas.
Nonprofits, private companies, and charities are not under obligation to comply with all requirements of SOX. However, this comes with a caveat – any private organization that knowingly falsifies or destroys financial data can still be penalized under some of the Act’s requirements.
While this stringent SOX adherence is mostly optional for non-public organizations, the requirements and controls around financial transparency, accuracy, and security that are inherent to SOX compliance are considered best practice for data risk management.
What Role Does Data Security Play in SOX?
IT departments and their critical role in ensuring data security for public companies are integral in helping to meet compliance requirements as the SOX Act lays out expectations for how electronic records are to be stored and handled in an organization. Data security controls spell out that an organization’s financial records need robust data security practices and processes to ensure security and visibility.
Related Reading: How to Secure Your Data Exchanges
How Managed File Transfer Helps Meet SOX Requirements 404 and 409
Protecting an organization’s financial data though tools such as secure managed file transfer solutions, help meet SOX compliance requirements 404 and 409, which address the integrity of private data.
Related Reading: What is MFT’s Role in Data-Centric Security?
GoAnywhere MFT secures files both in transit and while at rest and provides the audit trails and reporting functionality required for many compliance standards, including SOX as well as for PCI DSS, HIPAA, GDPR, and more.
When striving to meet SOX or other compliance requirements, organizations looking to streamline and automate processes can focus on the bigger picture versus riskier time-consuming and error-prone file transfer methods with an MFT solution in place.
With strong encryption protocol support for FTPS, SFTP, HTTPS, PeSIT as well as AS2, AS3, and AS4, automated workflows and an easy-to-use browser interface, GoAnywhere can ease some of the compliance burden for IT departments or others responsible for transferring sensitive financial data. Administrators can also set up user and group access to help control access to sensitive documents.
On-Demand Webinar: Meeting Compliance Requirements with GoAnywhere
Meeting SOX Compliance is Easier with GoAnywhere
To see how a robust file transfer solution, such as GoAnywhere can simplify the strict requirements of SOX, we offer 15-, 30-, and 60-minute demonstrations of the features of our file transfer solution that can help you avoid fines, maintain organizational reputation, and ensure the integrity and security of your data.
