SOX,a reform in corporate world-Success or Failure?

SOX was enforced 5 years back to bring reforms in corporates. After the fraud cases of Enron & other companies came into limelight, investors lost confidence on corporate entities. A debate started in US to overcome with this problem. There was a need to enforce an act which can assure integrity & completeness of reporting requirement, corporate governance, statutory compliance, social responsibility, internal control aspects in public entities to regain the lost confidence & trust of investors on public entities. SOX was enforced with such a motive. A section of community from corporate world criticised SOX on various ground. It was also felt that SOX compliance is not a easy deal both in terms of money & time. Specially, small entities faced such a problem. Advantages of SOX compliance overruled all such criticism. In fact, many private entities also started SOX compliance with a view to become public companies in future.

After 5 years of enforcement of SOX , investors feel same trust on public entities as was earlier. SOX assisted in fair reporting, in strengthening internal control aspects related to financials reporting, in corporate governance like statutory compliance & reporting, social responsibility etc. Success or failure of any act or law can be well defined by the one who comply it & the other who gets its benefits on compliance. With this view, I feel entities had also shown good positive response on its compliance which has given strength to trust of stakeholders on public entities.