Certification in Risk Management Assurance (CRMA) Practice Exam 2025 - Free CRMA Practice Questions and Study Guide

The acronym SOX stands for the Sarbanes-Oxley Act, which is a significant piece of legislation enacted in the United States in 2002. This act was a response to major corporate scandals and aims to protect investors by improving the accuracy and reliability of corporate disclosures. SOX establishes standards for all U.S. public company boards, management, and public accounting firms, focusing on enhancing transparency and accountability in financial reporting.

The relevance of SOX in risk management lies in its requirements for internal controls and auditing processes, which help mitigate financial fraud and promote ethical practices in corporate governance. It mandates that management publicly assess and report on the effectiveness of their internal controls, thereby directly influencing risk management strategies within organizations. Understanding the Sarbanes-Oxley Act is crucial for professionals in risk management, as it shapes the regulatory environment in which companies operate.