Some Facts About Sarbanes Oxley Act
Sox is an acronym for Sarbanes Oxley act and is a federal law which was officially signed by George Bush President of the United States of America. As per the statement of George Bush, this law included the business practices carried on during the period of Franklin D. Roosevelt this law had the most far reaching reforms. The legislation of this law is very wide and it also enhances the standards of all United States. Securities and Exchange Commission is required to obey the new law. The people who supported this law considered that the legislation of this law is very necessary; on the other hand according to the critics it does the economic damage.
This act has also set up the Public Company Accounting Oversight Board (PCAOB), which is a republic agency. This agency keeps the check on regulation of law, overseeing the law, and inspecting of the law. This act has various issues like auditor independence, assessment of the internal control and corporate governance.
This act contains various titles from corporate board responsibilities to all criminal penalties such as:
Auditors independence in Sarbanes Oxley This title includes nine sections in total and also has established the new standard for the independence of external auditor to reduce the conflicts. The section 201 restricts all auditing companies and does not let them do another business except auditing with the same clients. Corporate responsibility in Sarbanes oxley This title makes mandatory for every senior executive to take the task for the completeness and accuracy of all the financial reports. The title also enumerates particular confinements related to the behavior of all the corporate officers. Like section 302 in this title implies that CFO or the chief financial officer must pass the reports related to the integrity of the company. This helps in achieving accountability in the organization. Enhanced financial disclosures in Sarbanes oxley This title also has nine sections. This title enhances on the submission of all financial reports on the financial transactions done in the organization and this includes all transactions of the balance sheet and all the figures of pro-forma and has to submit the report on financial transactions of all the corporate officers. Commission recourses and authority in Sarbanes oxley This title includes four sections and it restores the confidence for investor and its security. Studies and reports This title has five sections in total and these sections are mainly related to the studies and public accounting firms' reports such as actions related to enforcement and security violations. Corporate and criminal fraud accountability This article has seven sections in total. This title describes about all the particular penalties of criminal that indulge in doing the financial destruction or even the alteration of all the financial records. White collar penalty enhancement This title in other words, also termed as white collar crime penalty enhancement act of 2002. In this section of article the criminal penalties are being charged more mainly for the white collar crimes as well as conspiracies. Corporate tax returns This title has one section which states that chief executive officer must approve the tax return of the company.
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