before SOX 1498



  • hi
    could anyone please tell me what was there before SOX? what laws/regulations did companies follow before?
    And what are the main differences?
    thanks



  • Hi and welcome to the forums 🙂
    This link provides some of the key legislation in place prior to SOX.
    Great link sharing history of SEC regulations
    en.wikipedia.org/wiki/U.S._Securities-and-Exchange_Commission
    SOX Information
    en.wikipedia.org/wiki/Sarbanes-Oxley_Act
    Major Law that was in affect prior to SOX related to financial disclosures
    en.wikipedia.org/wiki/Securities_Act_of_1933
    en.wikipedia.org/wiki/Securities_Exchange_Act_of_1934
    The U.S. Securities and Exchange Commission (the SEC) is a United States government agency having primary responsibility for enforcing the Federal securities laws and regulating the securities industry. The SEC was created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. 78d). In addition to the 1934 Act that created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940 and other statutes. The laws providing for the SEC removed some regulatory authority from the Federal Trade Commission.
    Move Recent SEC legislative amendments
    Related legislation
    1964 - Securities Act Amendments PL 88-467
    1968 - Securities Disclosure Act PL 90-439
    1975 - Securities and Exchange Act PL 94-29
    1980 - Depository Institutions and Deregulation Money Control Act PL 96-221
    1982 - Garn-St. Germain Depository Institutions Act PL 97-320
    1984 - Insider Trading Sanctions Act PL 98-376
    1988 - Insider Trading and Securities Fraud Enforcement Act PL 100-704
    1989 - Financial Institutions Reform, Recovery, and Enforcement PL 101-73
    1999 - Gramm-Leach-Bliley Act PL 106-102
    2000 - Commodity Futures Modernization Act of 2000
    2002 - Sarbanes-Oxley Act



  • The most recent regulation that compares to SOX, in my opinion, was the FCPA, the Foreign Corrupt Practices Act. However, it was not as far reaching and costly to implement.
    You can simply perform a search on google.com for FCPA if you would like more information.
    Hope this further helps,
    Milan



  • I agree with Milan, as far as legislated internal control requirments go.
    The internal control section of the FCPA is very similar to SOx, except that:

    1. it does not require an internal control framework (such as COSO);
    2. the control environment does not have to be tested internally OR externally; and,
    3. there are specifically no penalties for non-compliance.
      As far as comparing FCPA and SOx costs, the FCPA was much less expensinve to implement, chiefly because it WAS NOT implemented. If a company had implented the FCPA, complying with SOx would have been a walk in the park. By and large, the internal control requirements are largely unknown outside the Internal Audit (and now SOx) community.
      When queried, most companies believe that the FCPA is limited to companies that may be in a position to bribe foreign officials. While the main thrust of the FCPA is to prevent public companies from making such bribes, the internal control aspects are required for ALL companies, not just the companies with foreign (non-US) operations and /or transactions.
      John


  • Thanks for all your help 🙂
    Is it correct to say that before SOX US firms were principally following the SEA 1934? which was ammended over time, however there was no major legislation (i.e like in the UK) in the US until SOX



  • Shanice wrote: Is it correct to say that before SOX US firms were principally following the SEA 1934? which was ammended over time, however there was no major legislation (i.e like in the UK) in the US until SOX
    That is correct. SOx was the most-sweeping securities law in the U.S. since the (first) SEC Acts of 1933 and 1934. (These laws established the SEC, recognized the certification (CPA) for auditors, required annual independent audits of public companies’ financial statements, etc.)
    John


Log in to reply