SOX
U.S. federal law for financial reporting accountability and controls
APRA CPS 234
Australian prudential standard for information security resilience
Quick Verdict
SOX mandates financial reporting controls for US public firms via ICFR audits, while APRA CPS 234 requires cyber resilience for Australian finance with Board oversight and incident reporting. SOX ensures disclosure accuracy; CPS 234 protects data integrity.
SOX
Sarbanes-Oxley Act of 2002
Key Features
- Mandates CEO/CFO certification of financial reports (Section 302)
- Requires ICFR assessment and auditor attestation (Section 404)
- Establishes PCAOB for independent audit oversight
- Enforces strict auditor independence rules (Title II)
- Imposes criminal penalties for document tampering (Section 802)
APRA CPS 234
APRA Prudential Standard CPS 234 Information Security
Key Features
- Board ultimate responsibility for information security
- 72-hour APRA notification for material incidents
- Asset classification by criticality and sensitivity
- Systematic independent control testing required
- Third-party capability assessment and controls
Detailed Analysis
A comprehensive look at the specific requirements, scope, and impact of each standard.
SOX Details
What It Is
The Sarbanes-Oxley Act of 2002 (SOX) is a U.S. federal statute establishing corporate accountability standards for public companies. Enacted post-Enron scandals, it protects investors by enhancing financial disclosure accuracy and reliability. SOX uses a risk-based, control-oriented approach centered on internal controls over financial reporting (ICFR).
Key Components
- **Three pillarsPCAOB oversight (Title I), auditor independence (Title II), executive/board accountability (Titles III–XI).
- Key sections: 302/906 (certifications), 404 (ICFR), 409 (real-time disclosures).
- Relies on COSO framework; involves annual assessments and auditor attestations.
Why Organizations Use It
- Mandatory for U.S. public issuers to avoid fines, imprisonment, restatements.
- Builds investor trust, deters fraud, enables efficient operations.
- Offers M&A/IPO readiness, lower capital costs, governance strength.
Implementation Overview
- Top-down risk scoping, documentation, testing, monitoring cycle.
- Targets public companies; scaled for smaller filers.
- Annual audits; initial setup 12–18 months, perpetual compliance.
APRA CPS 234 Details
What It Is
APRA Prudential Standard CPS 234 (Information Security) is a binding regulation for APRA-regulated financial entities in Australia. Effective from 1 July 2019, it mandates resilience against information security incidents, including cyber-attacks, through a risk-based, assurance-driven approach focused on governance, controls, and third-party oversight.
Key Components
- 11 core requirements spanning board accountability, asset classification, commensurate controls, incident response, systematic testing, and internal audit.
- Built on CIA triad (confidentiality, integrity, availability) with principles for lifecycle management.
- No certification; compliance via self-assurance, testing, and APRA notifications (72 hours for incidents, 10 days for weaknesses).
Why Organizations Use It
- Mandatory for ADIs, insurers, super funds to avoid penalties, enforcement.
- Enhances cyber resilience, stakeholder protection, operational continuity.
- Builds trust, reduces third-party risks, aligns with CPS 220/230.
Implementation Overview
- Phased: gap analysis, policy framework, asset register, testing program.
- Applies to all sizes in banking/insurance/super; group-wide for heads.
- Involves audits, annual plan testing; third-parties from 2020.
Key Differences
| Aspect | SOX | APRA CPS 234 |
|---|---|---|
| Scope | Financial reporting internal controls | Information security and cyber resilience |
| Industry | US public companies (global reach) | Australian financial institutions |
| Nature | US federal statute, mandatory | Australian prudential standard, mandatory |
| Testing | Annual ICFR audits, PCAOB standards | Systematic security testing, internal audit |
| Penalties | Criminal fines, imprisonment for executives | Supervisory actions, remediation directives |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about SOX and APRA CPS 234
SOX FAQ
APRA CPS 234 FAQ
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