Nine years after the Sarbanes-Oxley Act was passed to establish a system of controls, audit solutions, and reporting, companies have found the legislation encouraged them to adopt efficient accounting practices that are good for their bottom line, according to The Gazette.
"Companies have figured out efficiencies and systems to reduce the compliance burden, while auditors have also gained efficiencies," Tom Hood, executive director of the Maryland Association of CPAs, told the news source.
Last year, the Dodd-Frank Wall Street Reform and Consumer Protection Act exempted smaller companies from a section of the law requiring auditors to examine and verify their internal control structures.
The news source explains that although organizations must still comply with Section 404(a) – which requires all public companies to include in their annual reports an analysis of their internal financial controls – businesses that are eligible for the exemption are relieved of the obligation to comply with Section 404(b), which calls for an independent auditor to support the assessment.
In June, the United States Department of Labor's Administrative Review Board expanded whistleblower protection under SOX after a case involving two pharmaceutical company workers who alleged that their employer was falsifying data.