What area does SOX of 2002 regulate?

The Sarbanes-Oxley Act (SOX) of 2002 primarily regulates the financial reporting of publicly traded companies. This legislation was enacted in response to major corporate and accounting scandals that shook public confidence in the U.S. financial markets, including scandals involving companies like Enron and WorldCom.

SOX set new or enhanced standards for all U.S. public company boards, management, and public accounting firms. Among its key provisions are requirements for enhanced financial disclosures and the establishment of internal controls over financial reporting to ensure accuracy and reliability. For example, it requires that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports.

This focus on financial integrity aims to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to securities laws. In contrast, the other options relate to areas not covered by this act, such as privacy rights, computer security practices, and telecommunications standards, which are governed by different regulations and acts.