Sarbanes-Oxley Act

Sarbanes Oxley

The Sarbanes-Oxley Act of 2002 (SOX , introduced in the United States of America in the aftermath of Enron , has fundamental governance implications for listed American companies , their foreign subsidiaries and foreign companies that have US listings . It applies to all Securities and Exchange Commission (SEC ) registered organizations irrespective of where their trading activities are geographically based SOX is different from the UK 's Combined Code , and from codes of corporate governance adopted elsewhere in the OECD , in that compliance is mandatory , rather than `comply or explain . This aspect , combined

br with significant potential sanctions for individual directors , is driving SOX compliance requirements through the supply chain

While the Act lays down detailed requirements for the governance of organizations , the three highest pro and most critical sections - which were implemented in phases - are 302 , 404 and 409

Sarbanes Oxley Act Sections 302 , 404 , 409

302 404 409

Required ? Quarterly certification of financial reports ? Disclosure of all known control deficiencies ? Disclose acts of fraud ? Management annually certify internal controls ? Independent accountant must attest report ? Quarterly change reviews ? Monitor operational risks ? Material event reporting ? `Real-time ' implications - 4 business days for report to be d

Responsible CEO CFO Management Independent auditor Management Independent auditor HYPERLINK "http /www .itgovernance .co .uk /corpgov_us .aspx http /www .itgovernance .co .uk /corpgov_us .aspx

Summary of Sarbanes-Oxley Act of 2002

Section 3 : Commission Rules and Enforcement

A violation of Rules of the Public Company Accounting Oversight Board "Board ) is treated as a violation of the '34 Act , giving...