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What is the Sarbanes Oxley Act?

The Sarbanes Oxley Act (SOX) is a very important law affecting corporate governance, financial disclosures, and public accounting passed in response to the collapse of Enron, Worldcom, and a few other corporations. Administered by the Securities and Exchange Commission, Sox publishes rules on requirements and defines which records are to be stored and for how long, stating that all business records, including electronic records and electronic messages, must be saved for not less than five years. Failure to comply with SOX can result in fines, imprisonment, or both. The Sarbanes Oxley Act also made it illegal for companies to take negative action against employees for blowing the whistle on various improper financial practices; it has, in fact, become one of the most important Whistleblower protection laws.