July 30, 2002
Sarbanes-Oxley Act signed into U.S. law
President Bush signed the Sarbanes-Oxley Act on July 30, 2002 — imposing strict financial reporting and internal-control requirements on U.S. public companies after Enron and WorldCom scandals.
What it was for
SOX made going public more expensive: Section 404 internal-control audits, CEO/CFO certifications, and heavier complianceFollowing laws and industry rules — privacy, security, and financial regulations for software companies. teams. Many tech startups delayed IPOs or stayed private longer; public SaaSSoftware as a Service — applications delivered over the internet on a subscription basis. companies built audit trails into engineering and finance systems that private firms later copied voluntarily.
Why it's here
SOX reshaped how public tech companies govern code, data, and financial systems.
Why it mattered
complianceFollowing laws and industry rules — privacy, security, and financial regulations for software companies. overhead changed the calculus of IPOInitial public offering — when a private company first sells shares on a stock exchange. timing for venture-backed startups.
What it solved
Investors had lost trust after accounting fraud at major corporations; markets needed enforceable transparency rules.
Media
- ImageSarbanes–Oxley Act
U.S. Government, Public domain, via Wikimedia Commons
Related
- NASDAQ peaks at the height of the dot-com bubbleMarch 10, 2000
- Enron files for bankruptcyDecember 2, 2001
- WorldCom files for bankruptcyJuly 21, 2002
- Shopify IPOMay 21, 2015