Arguably the most famous U.S. accounting legislation of the past decade, the Sarbanes-Oxley Act of 2002—more commonly known as SOX—turned 10 years old on July 29.

SOX was passed in the wake of several high-profile financial scandals, most notably Enron, WorldCom and Tyco, and established a system of controls, auditing and reporting with the intention of reforming public company accounting rules and avoiding future financial scandals. It came under fire for being a knee-jerk government reaction that introduced exhaustive and largely unnecessary accounting compliance hurdles for the vast majority of companies that operate above the board.

However, as Michael J. Gallagher, chairman of the Center for Audit Quality's Professional Practice Executive Committee, recently pointed out, the legislation also ushered in a number of benefits. Specifically, it provided strengthened audit committees, more robust corporate governance, enhanced auditor independence, improved transparency, more financial reporting accountability and independent auditing oversight. Although the new requirements may seem daunting, companies can work with simple accounting software to help ensure they are meeting expectations.

"We believe the act has been successful in achieving its objectives," said Gallagher in a recent statement before the U.S. House of Representatives' House Financial Services Committee, during a hearing held late last month to examine the burdens and benefits of SOX. "In many ways, it has also set new standards for corporate governance and auditor oversight that many other jurisdictions around the world have embraced. Also, we continue to examine ways to build upon the successful reforms of the act to enhance financial reporting and audit quality and promote greater investor protection."

Study finds SOX costs decrease over time

What's more, although many companies had to deal with considerably higher compliance costs in the wake of the legislation being passed, these have fallen significantly over time for most firms. Indeed, according to a recent survey conducted by Protiviti, nearly one-third of organizations believe the benefits of SOX outweigh its costs, while approximately half view the costs as outweighing the benefits "to some degree."

Unsurprisingly, the report revealed that large companies spend the most on compliance. The vast majority (80 percent) of midsize organizations spend $1 million or less annually, while most small companies dedicate less than $100,000 to the issue. Just 13 percent of firms said they believed the costs greatly exceeded the benefits.