9/14/15:
The Sarbanes-Oxley Act was enacted in
response to a series of high-profile financial scandals that occurred in the
early 2000s at companies including Enron, WorldCom and Tyco that rattled
investor confidence. The act, drafted by U.S. Congressmen Paul Sarbanes and
Michael Oxley, was aimed at improving corporate governance and accountability.
Now, all public companies must comply with SOX.
The
Sarbanes-Oxley Act not only affects the financial side of corporations.
The act is not a set of business practices and does not specify how a business
should store records; rather, it defines which records
should be stored and for how long. SOX states that all business records,
including electronic records and electronic messages, must be saved for "not
less than five years." The consequences for noncompliance are fines,
imprisonment or both.
