Introduction

In the US, circa 2009, the public’s image of corporate executives is often captured by what is commonly referred to in media and law enforcement circles as the “perp walk,” where an accused criminal is paraded in front of the cameras. This image is not without substance, as Court TV, CNN, MSNBC and every 24/7 cable news channel endlessly run these “gotcha” footages.

In this decade, CEOs have increasingly made the perp walk, putting themselves and their companies in the spotlight. Whether measured in quantifiable terms (sales, market value, etc.) or by that of corporate image, the damage to firms and their shareholders is in the billions of dollars and often entails bankruptcy and massive job losses (see Enron, WorldCom and Qwest).

While those in any facet of the auto ID industry can enumerate the myriad ways that RFID can benefit companies – visibility, coordination, reducing out-of-stocks etc. – we must remember that fear is a great motivator in life and in sales. In what one social commentator has described as our “jurisprudence culture,” the greatest fear of any American executive today can be encapsulated in one word – jail. If they and their companies run afoul of the law, their careers, their lives, their personal fortunes, and indeed, their companies, can be ruined.

SOX

As a reaction to the “fast and loose” accounting and oversight environment that made possible perhaps the worst corporate scandals in American business history, Congress took action to restore investor confidence in the public securities market. It rather quickly enacted the Public Company Accounting Reform and Investor Protection Act of 2002, more commonly referred to as the Sarbanes-Oxley Act, named after the chief, bipartisan sponsors of the bill, Maryland Senator Paul Sarbanes and Ohio Representative Michael G. Oxley. In fact, in an era of divisive politics, Congress was amazingly unified, approving the final law by a vote of 423-3 in the House of Representatives and by a unanimous vote in the Senate. When then-President George W. Bush signed the bill into law on July 30, 2002, he proclaimed: “The era of low standards and false profits is over. No boardroom in America is above or beyond the law.”

Sarbanes-Oxley, or SOX, has been described by analysts as the most comprehensive accounting and reporting reform enacted in the United States since The Great Depression. It impacts a wide range of corporate functions, most notably in the area of accounting and in the outside auditing of firms’ accounting operations. However, in practice, it will touch on every area of corporate operations, as it seeks accuracy in the reporting of both the results of operations and the true financial health of the company.