Documentation and due diligence are among the compliance challenges facing facing facility executives
Sarbanes-Oxley Act (SOX). The 2002 legislation, which has received no shortage of press, was introduced as a way to restore investor confidence in the wake of corporate accounting scandals like those involving Enron and WorldCom. By creating a Public Company Accounting Oversight Board (PCAOB), strengthening auditor independence, and increasing corporate management’s accountability for the quality of their organizations’ internal controls, SOX seeks to increase the transparency and rigor of all publicly owned companies’ fiscal management.
SOX is a complicated act with numerous provisions. Of most concern in general, however, is Section 404, which requires an annual assertion from every public company’s management that the internal controls over their financial reporting are effective. Section 404 also requires a statement from an independent auditor as to the quality of the internal controls and the presentation of the organization’s financial statements. As recent headlines attest, boards of directors and top management face severe penalties and even prison time if their statements are found to be false.
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