SARBANES-OXLEY ACT OF 2002

Sarbanes-Oxley Act of 2002

Sarbanes-Oxley Act of 2002

Introduction

In response to major corporate accounting scandals at large U.S. companies such as, Enron, and WorldCom, to name a few, the United States Congress passed a sweeping legislation in July 2002 aimed at improving the integrity of financial statements and related audits and mandating certain corporate governance practices within publicly traded U.S. companies.

Discussion

Section 302

The principal executive officer or officers of an issuer were always required to sign a company's periodic reports being filed with the Commission (Berlau, 2006). The Act needs that (1) they have reconsidered the report; (2) to the best of their information, the report “does not contain any untrue statement of a material detail or omit to state a material detail essential in alignment to make the declarations made, in lightweight of the attenuating factors under which such declarations were made, not misleading”; (3) to the best of their information, the economic declarations included in the filing present fairly in all material values the economic position and outcomes of procedures for the issuer for the period(s) offered; (4) the marking officers are to blame for revelation controls and interior controls over financial reporting, have assessed the effectiveness of the issuer's internal controls as of a designated day within 90 days former to the report designated day, and have presented their conclusions in the report about the effectiveness of internal controls; (5) the marking officers have revealed to the issuer's auditor and audit committee any important deficiencies in design or operation of interior controls, any material flaws in interior controls, or any deception (whether or not it is material) involving management or employees who play a significant function in the scheme of interior command; and (6) the marking officers must show if or not there have been any significant ...