Section 409 of the Sarbanes-Oxley Act (SOX)
Section 409 of the Sarbanes-Oxley Act (SOX) states that organizations that are subject to SOX are required to disclose to the public, on an urgent basis, information on material changes in their financial condition or operations. The disclosures must to be presented in terms that are easy to understand and supported by trend and qualitative information of graphic presentations as appropriate (SoxLaw, n.d.).
Section 409 mandates that the company must disclose to the public any information of material value that effects the organizations financial condition or operations. In other words, when a material financial change occurs in a publicly held company, it must be reported to regulators within 48 hours.
Compliance to Section 409 for financial organizations has proven to be complex and often times expensive since it is not uncommon for organizations to use Excel or other spreadsheets programs to maintain material financial events. These programs are not well suited for SOX 409 reporting time requirements. As a result, organizations have been forced to start using more sophisticated and expensive technologies, for example, applications such as Oracle and SAP enterprise suites (Toolbox web, 2005).
