![]() ![]() The main areas that the Act is focused on are: These rules were amendments and additions to several laws enforced by the Securities and Exchange Commission ( SEC), including the Securities and Exchange Act of 1934 and the Investment Advisers Act of 1940. Auditors, accountants and corporate officers became accountable for the new set of rules. Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices. While SOX received a great deal of criticism initially (some felt it was overly burdensome), today, many view its introduction as being critical to restoring investor confidence and for maintaining the integrity of the financial markets.The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and financial regulations for public companies. In the event that the CEO or CFO certifies a financial report that misleads or contains fraud, they can face a fine of up to $5 million and/or a custodial sentence of up to 20 years. Section 906: Corporate Responsibility for Financial Reports (Criminal Penalties) This is by far the most expensive and time-consuming requirement related to SOX. It also requires an assessment of the effectiveness of the internal control environment. This section requires that management assumes responsibility for maintaining an adequate internal control structure. Section 404: Management Assessment of Internal Controls This places responsibility for the accuracy and integrity of the organization’s financial statements and internal control environment with the Chief Executive Officer and Chief Financial Officer. ![]() While achieving SOX compliance involves addressing numerous areas, the following sections are where companies spend most of their efforts: Section 302: Corporate Responsibility for Financial Reports (Accuracy & Integrity) Title XI – Corporate Fraud and Accountability.Title IX – White-Collar Crime Penalty Enhancements.Title VIII – Corporate and Criminal Fraud Accountability.Title VI – Commission Resources and Authority. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |