SOX
U.S. legislation mandating financial reporting controls and accountability
ISO 22301
International standard for business continuity management systems
Quick Verdict
SOX mandates financial reporting controls for U.S. public firms with severe penalties, while ISO 22301 offers voluntary BCMS certification globally for resilience. Companies adopt SOX for legal compliance, ISO 22301 for disruption recovery and trust.
SOX
Sarbanes-Oxley Act of 2002
Key Features
- Mandates CEO/CFO certification of financial accuracy
- Requires ICFR management assessment and auditor attestation
- Establishes PCAOB for audit oversight and standards
- Enforces auditor independence and partner rotation
- Imposes criminal penalties for false certifications
ISO 22301
ISO 22301:2019 Business Continuity Management Systems Requirements
Key Features
- PDCA cycle for continual BCMS improvement
- Business Impact Analysis (BIA) and Risk Assessment
- Leadership commitment with policy and roles
- Operational testing via exercises and drills
- Annex SL integration with ISO 27001
Detailed Analysis
A comprehensive look at the specific requirements, scope, and impact of each standard.
SOX Details
What It Is
Sarbanes-Oxley Act of 2002 (SOX) is a U.S. federal statute regulating corporate governance and financial disclosures for public companies. Its primary purpose is protecting investors through accurate financial reporting. SOX employs a risk-based, control-oriented approach via SEC rules and PCAOB standards.
Key Components
- **Three pillarsPCAOB oversight (Title I), auditor independence (Title II), executive accountability (Titles III-IV).
- Core sections: 302 (certifications), 404 (ICFR assessments), 409 (real-time disclosures).
- Built on COSO framework for internal controls.
- Compliance model includes annual management reports and auditor attestations.
Why Organizations Use It
Enhances investor trust, reduces fraud risk, improves governance. Mandatory for U.S. public issuers; aids IPO/M&A readiness. Lowers cost of capital, streamlines operations via automation.
Implementation Overview
Top-down risk scoping, control design/testing, continuous monitoring. Applies to public companies globally listed in U.S.; phased rollout (scoping, remediation, testing). Requires 404(b) audits for accelerated filers.
ISO 22301 Details
What It Is
ISO 22301:2019 is the international standard specifying requirements for a Business Continuity Management System (BCMS). It enables organizations to protect against, reduce likelihood of occurrence, respond to, and recover from disruptions affecting critical products and services. Adopting a risk-based approach via the PDCA (Plan-Do-Check-Act) cycle and Annex SL high-level structure, it aligns seamlessly with other ISO management systems.
Key Components
- 10 clauses (4-10 auditable): context, leadership, planning (BIA/RA), support, operations (testing/exercises), evaluation (audits/reviews), improvement.
- Flexible requirements, no fixed controls; tailored to organizational context.
- Built on resilience principles; certification model with 3-year validity and annual surveillance audits.
Why Organizations Use It
Drives reduced downtime, cost savings, regulatory compliance (e.g., NIS Directive), enhanced stakeholder trust, lower insurance premiums, and competitive tender advantages. Mitigates risks from cyberattacks, disasters, supply chains.
Implementation Overview
Gap analysis, BIA/RA, policy development, training, testing, internal audits, external certification (two-stage process). Applicable to all sizes/sectors globally; accelerated by digital platforms (e.g., 6 months).
Key Differences
| Aspect | SOX | ISO 22301 |
|---|---|---|
| Scope | Financial reporting internal controls (ICFR) | Business continuity management system (BCMS) |
| Industry | U.S. public companies, all sectors | All industries worldwide, all sizes |
| Nature | Mandatory U.S. federal statute, SEC enforced | Voluntary international certification standard |
| Testing | Annual ICFR testing and auditor attestation | BIA, exercises, internal audits, certification |
| Penalties | Criminal fines, imprisonment for executives | Loss of certification, no legal penalties |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about SOX and ISO 22301
SOX FAQ
ISO 22301 FAQ
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