How the Sarbanes-Oxley Act Reshaped Records Management Practices

Sarbanes-Oxley Act

All businesses are held to certain standards when it comes to records management. Sometimes, regulations are in the form of industry-specific retention standards produced by governing bodies within that industry. Other times, laws passed at local, state, or federal levels can change the calculus of records management in an industry or across the broader business landscape. One example is the Sarbanes-Oxley Act, a broadly tailored piece of federal legislation that reshaped records practices across many industries.

A Brief History of the Sarbanes-Oxley ActSarbanes-Oxley Act Timeline

The Sarbanes-Oxley Act, or “SOX” as it’s informally known, is complex and covers a variety of issues relating to financial transparency and ensuring shareholder protection. How it relates to records management practices is straightforward. It underscores the importance of an effective records management system for all businesses, both for ensuring compliance and protecting stakeholder interests.

The Sarbanes-Oxley Act was signed into law by President George W. Bush in 2002, after passing in both the House of Representatives and the Senate by near-unanimous margins. Signed into law in the wake of multiple high-profile cases of fraud, including the 2001 Enron scandal. The Act is aimed at preventing financial malpractice through ensuring the accuracy of consistently produced financial statements.

SOX: How does it work?Section 404 and 802 Sarbanes-Oxley Act

SOX is the most famous for Section 404. This section requires that companies implement internal controls to improve and maintain their ability to produce accurate financial statements. This is the most impactful way in which the Sarbanes-Oxley Act impacts businesses. Section 404 is what people are often thinking of when referring to the Sarbanes-Oxley Act. This section is a key part of how the legislation works. It underscores the importance of good records management practices, since all companies are at risk of penalties for non-compliance.

Also, the “SOX” directly enforces document retention, through standards outlined in Section 802. This section requires accountants that review company financial statements to retain those records for a minimum of five years.  

The Sarbanes-Oxley Act and Records Management 

A thorough, effective records management system is a necessary part of Sarbanes-Oxley Act compliance. While some aspects of it speak directly to retention practices and standards, staying compliant with all tenets of “SOX” requires an organized records management system for efficient production of stored records. Contact Secure Records Solutions to learn more about a records management plan that helps you stay compliant with legislation like the Sarbanes-Oxley Act while meeting the unique needs of your business.  


Our Latest Consulting Insights

Why Quality Control Matters for Document Scanning Services

Document scanning services may seem simple. But document management pros know that it’s much more complex than just pressing a button and saving a file. Experience tells us that insufficiently digitized documents can result in significant and often permanent challenges. This underscores the importance of […]

Read More

HR Records Scanning: Digital Document Solutions for Your Business

HR records scanning can be a useful and efficient part of your small business’s document management plans. Scanning offers a mean of digitizing records and managing them in digital format, allowing you to save on space and other expenses associated with managing paper records. Digitization […]

Read More

How do Privacy Laws Influence Media Destruction?

At Secure Records Solutions, we know that staying abreast of federal and state privacy regulations can be a daunting task for any business. A multitude of laws govern how your company handles and disposes of sensitive information. The team at Secure Records Solutions knows that […]

Read More

How Document Management Can Save Money for Your Business

As business grow and evolve, they accumulate large numbers of records. This is often in the form of paper documents, and usually in amounts not previously anticipated. Now more than ever, businesses seek document management solutions for these records. Businesses acquire records for many reasons: […]

Read More

Document Management: An Alternative to Digitization

As the trend of digitization in business continues, business leaders must themselves continue to manage paper documents. They must do so with compliance standards and retention strategy in mind. This all makes paper record sets or other physical documents seem like extra weight to carry. […]

Read More

Four Document Management New Year’s Resolutions

A new year means new plans and resolutions, and 2023 is no different. We create new aspirations, both personal and professional, that we set each new year. When setting a professional goal for your business, think through to uncover the root of your problem. If […]

Read More