Comparison of US-SOX and J-SOX on the Requirements of Assessment and Auditing Concerning Internal Control Over Financial Reporting

A series of extra large financial frauds and audit failure cases, represented by Enron and WorldCom, has attracted close attention of legislation on the effectiveness of internal control over financial reporting. After the enactment of Sarbanes-Oxley Act of 2002 (US-SOX) in the United States, similar law and regulations are also published in Japan (J-SOX). This paper will compare and contrast J-SOX and US-SOX with regard to regulations and standards on the management assessment and audit concerning internal control over financial reporting. Similarities between the two laws are noted and differences are also discussed.