Summary ACCOUNTING AND AUDIT ENFORCEMENT

Sarbanes-Oxley Act of 2002 (SOX) only applies to publically trade companies. However, the scrutiny that nonprofit health organizations live under due to the nature of their business and tax-exempt status, likely leads the public to require that non-profit companies adhere to the same if not greater standards. SOX requires various standards be met to protect investors as well as increase corporate oversight of for profit health care organizations. Non-profit healthcare organizations tend to adhere to the same regulations. SOX requires that these companies adhere to many regulations. Amongst these regulations are the requirements that main executives and financial officers of publically traded companies must sign and certify annual and quarterly financial statements, as well as that all company's audit committees must be comprised only of independent directors. Additionally, SOX lays out guidelines regarding internal control reporting, code of conduct, and business ethics as well as programs for whistle-blowers [Jon03]. If adhered to strictly, SOX provisions will prove to be helpful in the reduction of fraud and an increase in corporate responsibility for both profit and non-profit healthcare organizations. The provisions of SOX seek to create an ethical workspace in which employees at all levels are held to a high standard in their business practices. If followed properly the regulations will create opportunities for effective audits that can detect any errors or fraud before it becomes a huge scandal. SOX also creates opportunities to increase the reliability and transparency of financial reports. The requirement of high-ranking executives to personally sign vouching for the accuracy of financial reports will increase corporate governance overall.