Who does Sarbanes-Oxley apply to?

The Sarbanes-Oxley Act of 2002 (SOX) was enacted by the U.S. Congress to protect investors by improving the accuracy and reliability of corporate disclosures. Its provisions apply to all "issuers," which are companies that have securities registered with the U.S. Securities and Exchange Commission (SEC) and are required to file reports under the Securities Exchange Act of 1934. This most directly and broadly refers to publicly traded companies in the United States.

A. This is too specific; while some foreign issuers and their subsidiaries are covered, the primary scope is all U.S. public companies.

B. SOX's primary focus is on public companies, not nonpublic (private) ones, although some provisions can apply in specific situations (e.g., obstruction of justice).

C. This is incorrect as SOX's main provisions are for public companies and those registered with the SEC, not nonpublic entities.

1. U.S. Securities and Exchange Commission. (2010). The Laws That Govern the Securities Industry. "The Sarbanes-Oxley Act of 2002." The SEC website states, "This act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the 'Public Company Accounting Oversight Board,'... to oversee the activities of the auditing profession."

2. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002). Section 2(a)(7) defines an "issuer" as an issuer whose securities are registered under section 12 of the Securities Exchange Act of 1934, is required to file reports under section 15(d), or has filed a registration statement that has not yet become effective.