Perhaps the single most important part of SOX to understand is the concept of "Internal Control Over Financial Reporting." Internal control is defined as a process created by or created under the watchful direction of the principle executive oficers and financial officers to provide reasonable asssurance that financial reporting and preparation of financial statements

for external purposes in accordance with generally accepted accounting principles. It includes those policies and procedures for maintaining accounting records, authorizing receipts and disbursements, and safeguarding assets. Compliance with SOX 404 will require large commitments of time and effort for both public company management and public company auditors, so it is critical to know the compliance due dates. An accelerated filer (a U.S. company with market capitalization over $75 million that has filed at least one annual report with the SEC) was required to comply with the SOX 404 requirements for its first fiscal year ending on or after November 15, 2004. A non-accelerated filer must begin to comply for its first fiscal year ending on or after July 15, 2007. Look for related Implementing SOX 404 articles about management's assessment process, the auditor's attestation and related required communications.

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