SOX
U.S. law for financial reporting controls and accountability
ISO 28000
International standard for supply chain security management systems
Quick Verdict
SOX mandates financial reporting controls for U.S. public companies with severe penalties, while ISO 28000 offers voluntary supply chain security framework globally. Companies adopt SOX for legal compliance; ISO 28000 for resilience and market trust.
SOX
Sarbanes-Oxley Act of 2002
Key Features
- Mandates CEO/CFO certification of financial accuracy
- Requires ICFR assessment and auditor attestation
- Establishes PCAOB for audit firm oversight
- Enforces auditor independence and rotation rules
- Imposes criminal penalties for false certifications
ISO 28000
ISO 28000:2022 Security management systems — Requirements
Key Features
- Risk-based supply chain security assessment and treatment
- PDCA cycle for continual SMS improvement
- Top management leadership and policy commitment
- Controls for external providers and processes
- Integration with ISO 31000 and ISO 22301
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 post-Enron scandals. It mandates internal control over financial reporting (ICFR) assessments via a risk-based approach using frameworks like COSO.
Key Components
- 11 Titles covering PCAOB oversight (Title I), auditor independence (Title II), certifications (Sections 302/906), ICFR (Section 404), and penalties (Sections 802/906).
- Core elements: entity-level controls, ITGCs, process controls; no fixed control count but focuses on key risks.
- Compliance via annual management reports and auditor attestations for most issuers.
Why Organizations Use It
Public companies comply to avoid criminal penalties, restatements, and delisting. Benefits include investor trust, reduced fraud risk, operational efficiency, and M&A readiness. Enhances governance and lowers cost of capital.
Implementation Overview
Top-down risk scoping, documentation, testing, remediation in phased cycles. Applies to U.S.-listed firms; exemptions for smaller/EGCs. Requires ongoing monitoring, GRC tools; audit committee oversight essential. (178 words)
ISO 28000 Details
What It Is
ISO 28000:2022 is an international standard specifying requirements for a security management system (SMS) focused on supply chain security. It adopts a risk-based PDCA (Plan-Do-Check-Act) methodology to manage threats like theft, sabotage, and disruptions across supply chains.
Key Components
- Clauses 4–10: context, leadership, planning, support, operation, performance evaluation, improvement.
- Risk assessment/treatment aligned with ISO 31000.
- Controls for processes, suppliers, equipment, and security plans (response, recovery).
- Certification via audits per ISO 28003.
Why Organizations Use It
- Mitigates operational risks and ensures continuity.
- Meets contractual, regulatory, insurance demands.
- Enables market access, reduces incidents, lowers costs.
- Builds trust through integrated governance and assurance.
Implementation Overview
- Phased: gap analysis, risk planning, controls, audits, reviews.
- Scalable for all sizes/sectors; 6–36 months typical.
- Optional third-party certification with surveillance.
Key Differences
| Aspect | SOX | ISO 28000 |
|---|---|---|
| Scope | Financial reporting internal controls (ICFR) | Supply chain security management system |
| Industry | U.S. public companies, all sectors | All industries, supply chain focused, global |
| Nature | Mandatory U.S. federal law, SEC enforced | Voluntary international certification standard |
| Testing | Annual ICFR audits by PCAOB auditors | Internal audits, optional third-party certification |
| Penalties | Criminal fines, imprisonment for executives | No legal penalties, loss of certification |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about SOX and ISO 28000
SOX FAQ
ISO 28000 FAQ
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