Sarbanes-Oxley (SOX) is a US federal law enacted in 2002 that mandates strict financial governance for public companies. For SaaS businesses, SOX compliance affects revenue recognition processes, audit trails in billing systems, and access controls over financial data.

Example: A publicly traded SaaS company undergoing SOX compliance must demonstrate that its billing system has full audit logs of all revenue entries, that access to financial systems is controlled and reviewed quarterly, and that revenue recognition follows documented ASC 606 policies.