According to Wikipedia:
The Sarbanes-Oxley Act of 2002, also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002. The legislation set new or enhanced standards for all U.S. public company boards, management and public accounting firms. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law.
An article on iSixSigma narrates a story about a SOX-compliant company that one day finds out that its financial records are all messed up. What got the company panicky was that the mess could have the company end up in jail.
What saves the company is the Lean Six Sigma and the quick action from Six Sigma Black Belts. After the mess has been resolved, these are what the company learned:
- Sarbanes-Oxley requires companies to accurately control their financial reporting and holds executive management responsible for these controls.
- Financial processes are just that – processes. They can be improved using Lean Six Sigma, just like any other process. Statistical process control charts are especially effective ways of monitoring the performance processes, including those in finance.
- Segmenting inputs to financial measures is often helpful in identifying the key suspects in performance variation.
- Some financial measures (like variances and controls) sound like statistical terms though they are completely different. Operational definitions are needed to prevent confusion.
