Infographic: What Sarbanes-Oxley Act Says About Text Message Archiving?

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The Sarbanes-Oxley Act of 2002, more commonly known as SOX, is a U.S. federal law enacted in response to high-profile financial statement fraud, particularly the Enron and WorldCom scandals that occurred in the 2000-2002 period. At its core, the legislation aims to protect shareholders and the public against fraudulent practices in all publicly-held American companies.

This legislation also applies to any international company that has registered equity or debt securities with the U.S. Securities and Exchange Commission (SEC), and to any accounting firm or another third party that provides financial services to either of the above entities.

SOX Archiving Requirements

The legislation does not have any specific guidelines on a how a company should store records but specifies the types of records that need to be archived, as well as the duration of the retention. Three specific Section 802 rules relate to electronic records archiving and management:

  • The destruction, alteration, or falsification of records.
  • A mandatory 7-year retention period for all record storage.
  • The exact type of records requiring storage, including all business communications and related records.

With the huge increase in the use of text messaging in business, the retention of text messages is of paramount importance. Moreover, the ability to track and monitor all incoming and outgoing SMS messages and other types of electronic correspondence is critical for compliance with the legislation.

Cost of Non-Compliance

Under Section 802, SOX has the power to penalize companies for knowingly destroying, altering, and falsifying records with the intent to impede or influence a federal investigation. The enforcement actions for non-compliance can include fines, removal from listings on public stock exchanges and invalidation of D&O insurance policies.

Furthermore, CEOs and CFOs are also held accountable and can incur hefty penalties for the company’s actions, especially if they disclose inaccurate information. If the executive was not aware of the company’s wrongdoing, he or she still could face a one million dollar fine and up to ten years imprisonment. If the records are knowingly reported incorrectly, the CEO or CFO can be fined up to five million dollars and face up to 20 years in prison.

Industry Best Practices for SOX Compliance

The best action plan to stay compliant with SOX text message archiving is to stay updated with the legislation. Staying current with the regulations, best practices, interpretations, and external audit frameworks are critical to avoiding a casual and outdated interpretation of the rule that can lead to hefty penalties and serious legal ramifications.

Regarding archiving and managing electronic records such as SMS messages, there are four key components to ensure compliance with SOX text message archiving rules. Text messages must be tamper-proof; They must be password protected, read-only and non-erasable, encrypted and digitally signed. They must exist in a formidable system both on and off-line. The use of mobile device and text messaging must also follow the defined policies of the business. Policies include what mobile communications should be archived, retention period and how these communications are protected. The records should be readily accessible and ready for audit by a third party. Finally, text messages must be fully indexed and provide full search capability.

What Sarbanes-Oxley Act Says About Text Message Archiving?

TeleMessage, a global leader in innovative SaaS messaging and mobility solutions for enterprises, offers all these archiving features to companies under SOX requirement through our Mobile Archiver solution. With our platform, we can help you meet the SOX compliance mandates for managing electronic records including SMS texts, encrypted communications, direct message or any other type of electronic messaging system.

Contact us today by calling +1 (978) 263-1015, or visit our website www.telemessage.com.

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