Navigating the US Tax code
In terms of accounting, compliance simply means making sure that a company’s financial matters are being handled in accordance with federal laws and regulations. At any point in time, a corporation should be able to provide accurate information about its accounts to its shareholders or to regulating authorities, such as the Securities and Exchange Commission (SEC). To ensure compliance, it’s necessary to have processes in place for recording, verifying, and reporting the value of a company’s assets, liabilities, debts, and expenses.
In the wake of several corporate accounting scandals, the Sarbanes-Oxley Act was enacted in 2002. This act created a new set of standards in the accounting and internal auditing practices of publicly-traded companies. The Sarbanes-Oxley act consisted of 11 titles that specified the requirements and mandates for compliance in accounting and financial reporting.