Sarbanes Oxley Act 2002

PCAOB Public Company Accounting Oversight Board

5 SEC approved members, only CPA's, oversees external auditing and corporate governance issues. Annual quality control inspections must be done every year if the firms audit's more than 100 firms otherwise once every three years

Section 906

Corporate responsibility for financial reports Financial stmts fully complies w/SEC reqs info fairly reps all material aspects

Section 302

Corporate responsibility of the financial reports-CFO and CEO must review and certify reports not contain misrepresentations fairly presented responsible for internal controls must report deficiencies in internal controls or fraud involving mgmt material changes to int controls

Section 404

Management assessment of internal controls (404 a) Issuers are required to include in their annual report, an internal control report (404 b) Registered public accounting firm that prepares or issues the audit report for the issuer shall attest to, and report on, the assessment made by the management of the issuer.

Section 202

Pre-approval requirements from audit comittee

Section 1107

Retaliation Against Informants Any individual who knowingly retaliates or takes any action harmful to any person providing information relating to the commission or possible commission of any federal offense, shall be fined or imprisoned not more than 10 years, or both

Accelerated SEC Filers

have an aggregate market value at least $75 million subject to the SEC's periodic reporting requirements for at least twelve months are not eligible to use the SEC's small business reporting form

Section 204

Auditor reports to audit committee

Sarbanes Oxley Act

enacted in 2002 created the PCAOB Public Company Accounting Oversight Board

Section 602

Appearance and practice before the commission The SEC may censure any person

Section 203

Audit Partner Rotation

Section 406

Code of ethics for Senior financial officer

Section 407

Disclosure of Audit committee financial expert

Section 401

Disclosures in periodic reports

Section 1001

Federal income tax return of a corporation should be signed by the chief executive officer

Section 201

Prohibits external auditors from providing certain services to a client corporation

Section 301

Public company audit committee- to oversee the work of the hired public accounting firm Each member of the audit committee shall be a member of the board of directors of the issuer, and shall otherwise be independent

Section 1102

Tampering with a Record of Otherwise Impeding an Official Proceeding shall be fined under this title or imprisoned not more than 20 years, or both

Three Important ACTs in the U.S.

The 1993 Securities Act-regulates issuance of new securities The Securities Exchange Act of 1934-regulates purchases and sales after initial issuance Sarabanes Oxley Act of 2002

Section 802

criminal penalties for altering documents- if you destroy documents you can get fines or prison up to 20 years. An accountant who conducts an audit of an issuer of securities shall keep paperwork for 5 years. PCAOB changed to 7 years

Section 501

Treatment of securities analysists by registered securities associations and national security exchanges has to report whether he or she holds any securities Prohibits retaliating or threatening to retaliate against securities analysts securities analysts working for the firm performing the IPO are prohibited from publishing or distributing research reports

Section 806

Whistleblower Protection for Employees of Publicly Traded Companies