Difference Between SOX and Internal Audit
SOX vs Internal Audit
SOX or Sarbanes–Oxley Act of 2002 is also known as the Corporate and Auditing Accountability and Responsibility Act and Public Company Accounting Reform and Investor Protection Act. Sarbox was enacted in 2002. This act set a standard for all public board companies, public accounting firms, and management in the United States.
SOX was named after U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. SOX was enacted after a large number of scams and scandals related to major corporate and accounting firms such as Enron, Adelphia, and Worldcom came to light.
The SOX Act had brought about revolutionary changes in the internal control and governance of all listed companies in the NYSE for determining financial risks and fixing problems related to the risks.
Now let us talk about internal auditing. It is an independent way for looking into an organization’s activities. Internal auditing adds value and helps in the improvement of an organization. Internal auditing helps to bring a disciplined and systematic approach. It also helps in evaluating and improving the effectiveness of a company by evaluating the internal assessment of the firm’s performance.
The SOX Act highlights the role of the internal auditors. After the SOX Act was enacted, a new dimension has been brought to internal auditing. Some think that SOX is part of internal auditing, but it is not so; they are totally different. SOX also requires independent auditors for auditing.
Summary:
1.SOX or Sarbanes–Oxley Act was enacted in 2002.
2.The SOX Act set a standard for all public board companies, public accounting firms, and management in the United States.
3.The SOX Act had brought about revolutionary changes in the internal control and governance of all listed companies in the NYSE for determining financial risks and fixing problems related to the risks.
4.Internal auditing is an independent way for looking into an organization’s activities.
5.Internal auditing helps to bring a disciplined and systematic approach. It also helps in evaluating and improving the effectiveness of a company by evaluating the internal assessment of the firm’s performance.
6.The SOX Act highlights the role of the internal auditors. After the SOX Act was enacted, a new dimension has been brought to internal auditing.
7.SOX was named after U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley.
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