TOPIC VI: Standard

setting, best practices

and corporate
governance reform
Pre s e n t e d B y:
Armand C. Mauricio

6.3 Legislative
Initiatives And
S a r bProposals
a n e s - O a x l e y o r S OX

ABOUT

S a r b a n e s - O a x l e y o r S OX
Also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and
commonly called Sarbanes-Oxley, Sarbox Or SOX.
Created the "Public Company Accounting Oversight Board," also known as the PCAOB, to
oversee the activities of the auditing profession.
The act contains 11 titles, or sections, ranging from additional corporate board responsibilities
to criminal penalties.
Enacted on July 30, 2002 and named after sponsors,
Sarbanes and U.S Representative

U.S. Senator Paul

Michael G. Oxley.

BENEFITS

S a r b a n e s - O a x l e y o r S OX

Reliability of Financial Information

Strengthe
ning
Corporate
Governan
ce

Reduction of Financial
Statement Fraud

CONTENTS

S a r b a n e s - O a x l e y o r S OX

TITLE IV
ENHANCED
FINANCIAL
DISCLOSURES

TITLE II
AUDITOR
INDEPENDENCE

TITLE I
PUBLIC
COMPANY
ACCOUNTING
OVERSIGHT
BOARD

TITLE III
CORPORATE
RESPONSIBILITY

TITLE V

CONTENTS

S a r b a n e s - O a x l e y o r S OX

ANALYST
CONFLICTS
OF
INTEREST

TITLE IX
WHITE-COLLAR
CRIME PENALTY
ENHANCEMENTS

TITLE VII
STUDIES
AND
REPORTS

TITLE VIII
TITLE VI

COMMISSION
RESOURCES
AND
AUTHORITY

CORPORATE AND
CRIMINAL FRAUD
ACCOUNTABILITY

CONTENTS

S a r b a n e s - O a x l e y o r S OX

TITLE XI
CORPORATE
FRAUD AND
ACCOUNTABILITY

TITLE X
CORPORATE
TAX RETURNS

IMPORTANT SECTIONS
S a r b a n e s - O a x l e y o r S OX

Section
302
Corporate
Responsibil
ity for
Financial
Mandates
a set
ofReports
internal
procedures
designed to
ensure accurate
financial
disclosure.

Section
401
Disclosur
es in
Financial
Periodic
statements are
Reports
published
by

issuers are
required to be
accurate and
presented in a
manner that does
not contain
incorrect
statements or

Section
404

Section
409

Manageme
nt
Assessment
of Internal
Requires
each
annual
report
Controls

Real Time
Issuer
Issuers are
Disclosur
required to
es
disclose
to the

of an issuer to
contain an
internal
control report.

public, on an
urgent basis,
information on
material
changes in their
financial
condition or

IMPORTANT SECTIONS
S a r b a n e s - O a x l e y o r S OX

Section 802

Section 906

Penalties for altering

Whoever knowingly alters, destroys,
documents
mutilates, conceals,
covers up, falsifies,

Corporate
Responsibility for
Section
906 states: Reports
Failure of
Financial

or makes a false entry in any record,

document, or tangible object with the
intent to impede, obstruct, or influence
the investigation or proper
administration of any matter within the
jurisdiction of any department or
agency of the United States or any case
filed under title 11, or in relation to or
contemplation of any such matter or
case, shall be fined under this title,

corporate officers to certify

financial reports

a) Certification of Periodic Financial

Reports.
b) Content.
c) Criminal Penalties.

IMPORTANT SECTIONS
S a r b a n e s - O a x l e y o r S OX

Section 1107
Criminal penalties for
retaliation against
Whoever knowingly, with the intent to
retaliate, whistleblowers
takes any action harmful to any
person, including interference with the lawful
employment or livelihood of any person, for
providing to a law enforcement officer any
truthful information relating to the
commission or possible commission of any
federal offense, shall be fined under this title,
imprisoned not more than 10 years, or both.

APPLICATION

S a r b a n e s - O a x l e y o r S OX

The Act Applies to all public companies in the U.S. and

international companies that have registered equity or debt
securities with the SEC and the accounting firms that provides
auditing services to them.

REFERENCES

S a r b a n e s - O a x l e y o r S OX
http://www.sec.gov/about/laws/soa2002.pdf
http://www.ukessays.com/essays/accounting/theintroduction-of-the-sarbanes-oxley-act-accountingessay.php#ixzz30QLm2Crz
http://www.sox-online.com/soxact.html#title1

http://www.charleshooper.net/blog/why-was-the-

sarbanes-oxley-act-of-2002-created-and-how-does-itimpact-financial-reporting-today
http://www.ehow.com/about_5526341_reasons-sarbanesoxley-act.html

http://www.marcusletter.com/Sarbanes-Oxley.html
http://www.slideshare.net/vinaya.hs/sarbanesoxley-actsox
http://www.ehow.com/about_5445627_sarbanesoxley-

Thank You!
MAURICIO, ARMAND C.