The US government introduced a new compliance standard, Sarbanes-Oxley Act (SOX), for domestic and foreign entities doing business with the US. These laws were in response to the multiple corporate collapses such as Enron and Worldcom, which were a result of poor financial reporting and internal control failures.
SOX has significantly contributed to the existing external compliance burden on corporations and has had a major impact on the way Corporations prepare for their Financial Reporting disclosures.