Sarbanes Oxley Act

Title V (SOX)

Analyst conflicts of interest -- SEC must address conflicts of interest.

Title IV (SOX)

Enhanced financial disclosures. Report on effectiveness of internal controls and procedures, disclosures of off-balance sheet transactions.

Title VII (SOX)

Studies and Reports: federal studies of consolidation of accounting firms.

The Sarbanes-Oxley Act

(2003) Legislative response to a series of corporate accounting scandals in the early 2000s (Enron).

PCAOB

(Public Company Accounting Oversight Board) Board created from Title I of SOX, the board had to maintain compliance with standards and enforce discipline. Meant to reestablish independence of auditing companies from publicly traded orgs.

Title X (SOX)

CEO should sign company's income tax return

Title VI (SOX)

Commission Resources & Authority. Additional funding for SEC.

Title XI (SOX)

Corporate Fraud and Accountability: courts and regulatory bodies get more power. Fines and imprisonment for tampering with records, impeding official proceedings, taking extraordinary payments, retaliating against whistle-blowers, etc.

Title VIII (SOX)

Corporate and Criminal Fraud Accountability: tougher criminal penalties for financial fraud, AND protects employees who report fraud

Title III (SOX)

Corporate responsibility. CEOS must certify annual and quarterly reports to the SEC, rules of conduct for companies about pension black out periods.

Title I (SOX)

Created the PCAOB (Public Company Accounting Oversight Board), the board had to maintain compliance with standards and enforce discipline. Meant to reestablish independence of auditing companies from publicly traded orgs

Title II (SOX)

Auditor independence. Prohibits "nonaudit" services Can't hire a senior employee if he/she worked at the audit company within the past 12 months Senior auditors must rotate every 5 yrs Junior auditors must rotate every 7 yrs Firm must report to the corporation's auditing committee Auditors have to disclose all communication between the firm and its client

Title IX (SOX)

White Collar Crime Penalty Enhancements. Attempted white collar crime = completion of crime. Periodic reports must be certified or the corporation will be penalized.