How to use AI to achieve SOX compliance

When it comes to corporate accountability, the Sarbanes-Oxley Act is one of those regulations that many have heard about but may not know enough about how it applies to them.

Enacted to address the numerous early-2000s corporate scandals, SOX essentially changed how public companies record, store, and report financial data. What was once perceived as a guideline mainly for accountants and auditors, today it’s security teams who also need to pay attention.

As financial reporting now depends on complex IT systems, cloud platforms, and AI-driven tools, SOX compliance has become as much a data security challenge as it is a financial one. A single data leak or misconfigured access control can be as damaging as a fraudulent spreadsheet entry.

Understanding SOX today means understanding how finance, cybersecurity, and trust must work together. Regulators are not budging with their focus on timely cyber-incident disclosure and internal controls, so companies need to treat data governance as a living part of compliance.

Whether you work in security, compliance, or technology leadership, knowing how SOX fits into the data protection equation is a must.

What is the Sarbanes-Oxley (SOX) act?

The Sarbanes-Oxley Act (SOX) of 2002, a U.S. federal legislation, was created to protect investors by increasing transparency in financial reporting by corporations. It was enacted in response to high-profile financial scandals such as Enron, WorldCom, and Tyco.

What are the key goals of SOX?

The controls that govern SOX ensure the accuracy, reliability, and security of financial data, and apply to both business and IT domains. The objective of these controls is to keep systems accurate, complete, and error-free to avoid potential impacts on financial reporting.

The measures within the act are about increasing accountability and transparency for corporations so investors and the public are protected from fraudulent activity. They include a combination of increased regulatory oversight, stricter penalties for violations, and additional protections for individuals who help in the identification and prosecution of such violations.

The SOX act is comprehensive, to say the least, but these are they key goals of the act you should know about:

• Enhances the reliability of corporate disclosures and financial statements

• Promotes auditor independence
• Increases corporate responsibility
• Increases transparency in financial reporting
• Increases penalties for fraudulent financial activities

Who does SOX apply to? 

SOX primarily applies to all publicly traded companies, their wholly owned subsidiaries, and foreign firms trading publicly in the U.S. Accounting firms auditing these companies are also regulated by SOX.

While private companies, nonprofits, and charities are not generally bound by all SOX requirements, those that destroy or falsify financial data can face penalties.

SOX also requires companies to implement internal controls impacting financial reporting. 

What are some recent examples of SOX violations?

Over the last few years, numerous significant data breaches have occurred that are examples of SOX violations, particularly as they pertain to the protection of financial data and the timely disclosure of cybersecurity incidents.

MOVEit Data Breach (2023)

In 2023, a vulnerability in the MOVEit file transfer software, owned by Progress Software, was exploited, leading to a widespread data breach affecting numerous organizations, including publicly traded companies. The cybercriminal group Clop claimed responsibility for the attacks, which compromised sensitive data across various sectors. In November of 2024, Amazon confirmed employee data was exposed as a result of the breach.

SEC Enforcement Action Against Intercontinental Exchange (2024)

In May of 2024, the Securities and Exchange Commission (SEC) fined Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, $10 million for failing to promptly disclose a 2021 cyber breach that affected multiple subsidiaries. 

National Public Data Breach (2024)

In April 2024, Jerico Pictures Inc., operating as National Public Data, suffered a massive data breach that exposed the personal information of approximately 2.9 billion individuals. The breach, executed by the cybercrime group USDoD, involved the release of sensitive data, including social security numbers and addresses. 

Metro Bank rule breach (2025)

In 2025, a UK tribunal upheld fines from 2022 against Metro Bank’s former CEO and CFO for publishing misleading financial information. The accounting error was significant at GBP 900 million, but the company was not found to have acted recklessly.

What potential compliance issues does SOX address?

Designed to protect investors from fraudulent practices within corporations, SOX encompasses a broad range of potential compliance issues. These include inadequate internal controls over financial reports, lack of proper documentation, insubstantial external audit inspections, failure to uphold data integrity, weak whistleblower protections, and more. 

Here is a list of potential SOX compliance issues in more detail, which drive home the importance of avoiding corporate mishaps and maintaining a high level of transparency in financial reporting.

• Inadequate internal controls over financial reporting, leading to material misstatements or errors in financial statements. This could involve lack of proper segregation of duties, insufficient documentation, or ineffective monitoring controls.
• Failure to maintain accurate and complete audit trails or records related to financial transactions, potentially obstructing audits or investigations.
• Lack of independence or skepticism from external auditors, resulting in failure to identify or report material weaknesses or fraud.
• Unauthorized access, alteration, or destruction of financial data, compromising data integrity and reliability.
• Ineffective whistleblower protections, discouraging employees from reporting potential violations or fraud.
• Inadequate disclosure controls, leading to failure to properly disclose material events, risks, or changes that could impact financial conditions.
• Weak cybersecurity measures, leaving financial systems and data vulnerable to breaches or cyber attacks.
• Lack of proper training and awareness programs, resulting in employees being unaware of SOX requirements or their responsibilities.

How Concentric AI can help your SOX Compliance

Concentric AI is designed to improve a company’s ability to comply with regulations like the Sarbanes-Oxley Act (SOX). By leveraging advanced AI, Semantic Intelligence provides valuable insights into data management, privacy, and security practices to ensure data integrity— an essential element of SOX compliance.

Assess risk

One of the primary requirements of SOX is to maintain accurate and reliable business records. Semantic Intelligence uses deep learning to categorize and assign risk profiles to business-critical data. You get a comprehensive view of all your sensitive data, wherever it lives, which may include financial spreadsheets and internal audit reports. With a clear understanding of your data’s risk, you can identify data accuracy issues, avoid data manipulation, and maintain a high level of data integrity.

Understand context

Data context is everything. Semantic Intelligence understands the context of business-critical data and can recognize when the data is at risk or out of compliance. By identifying sensitive data, understanding its risk, and automating its protection, our platform effectively secures data against unauthorized access or alteration, a key aspect of SOX regulations that require financial data to be protected.

Improve financial controls

SOX compliance also requires maintaining transparent and effective internal controls over financial reporting. Semantic Intelligence provides clear visibility into data handling and access procedures, identifying overexposed or overshared sensitive data, improper access controls, and abnormal data access or interactions.

Maintain data trails

With Semantic Intelligence, your ability to maintain data access logs is improved, which can be a valuable resource during SOX audits. Our solution enables you to identify patterns or irregularities in data access that may indicate a security concern, helping you proactively manage potential risks.

Ensure transparency

Under SOX, companies are required to disclose any material changes in their financial condition or operations. By continuously monitoring and profiling data, Semantic Intelligence can detect significant deviations or changes in data trends that may require disclosure — which can be a huge step towards maintaining transparency.

Data accountability

Finally, Semantic Intelligence supports the SOX principle of accountability. By tracking all interactions with sensitive data and recording who has accessed what information and when, our solution helps enforce individual accountability for data handling and compliance.

Concentric AI and SOX: the bottom line

With our deep learning AI capabilities, Semantic Intelligence helps you meet SOX compliance requirements by:

• Ensuring data integrity
• Enhancing internal controls
• Providing transparency
• Supporting accountability
• Reducing the risk of financial fraud

Customers are successfully using our product in production for petabytes of data for:

• Data Security Posture Management
• Data Access Governance with Remediation
• Data Classification
• Privacy Data Protection