An experienced New York financial and audit professional, Igor Zernitsky is the chief financial officer at Property Resources Corporation (PRC), a top New York real estate firm that specializes in the acquisition, development, and management of multifamily properties. Before joining PRC, Igor Zernitsky worked with Ernst & Young as a senior manager where he was in charge of all auditing processes including SOX testing.
SOX testing is the process that helps companies to formulate a system of assessing internal checks and balances to boost financial reporting transparency. The Sarbanes-Oxley Act of 2002 mandated SOX which is a U.S. federal law intended to boost the accuracy and reliability of disclosures to ensure investors aren’t exposed to fraudulent accounting practices.
The SOX bill came into effect after fraud and accounting scandals which affected Tyco International, Enron Corporation, and WorldCom. SOX applies to all U.S. publicly traded companies including wholly-owned subsidiaries as well as publicly-traded foreign companies that conduct business activities within the U.S. territory.
SOX avails a framework that helps companies to be accountable in their financial records which makes it easier to access capital markets as a result of improved financial reporting practices. SOX has a strong focus on data security and integrity which means SOX compliant companies are safeguarded from cyberattacks and other data breaches which can be costly to fix and negatively impact a company’s brand image. SOX compliance improves both internal teams as well as cross-functional communication especially for teams involved in auditing procedures.
A major SOX requirement is that CEOs and CFOs should take responsibility for all financial reports concerning the accuracy, documentation as well as submission of reports. Private companies, non-profits, and charities are not mandated to comply with the entire provisions of SOX. However, private entities are forbidden from engaging in malpractices that falsify and willingly destroy data. Private firms preparing for an Initial Public Offering must comply with SOX provisions before going public.
