The Sarbanes Oxley Act (SOX) was passed by the United States Congress in 2002, to protect shareholders and the public from accounting errors and fraudulent practices in companies and to improve the accuracy of corporate disclosure.
- Board Oversight- This board sets standards and rules for audit reports. All accounting firms that audit public companies must register with the Oversight Board. It also inspects, investigates, and enforces compliance from these registered firms.
- Auditor Independence-Auditors now have a list of non-audit services they can’t perform during an audit. The Act also imposes a one-year waiting period for audit firm employees who leave an accounting firm to become an executive for a former client. In addition, the former firm must wait one year before performing any audit services for the new employer.
- Greater Finacial Disclosure-Transactions and relationships that are off-balance sheet but that may affect financial status now must be disclosed. Personal loans from a corporation to its executives are now largely prohibited.
- Conflict of Interest Disclosures for Analysts-Conflict of interest disclosures now need to be made by research analysts who make public appearances or offer research reports. These disclosures need to contain certain information about the company that is the subject of the appearance or report. The analyst has to report whether he or she holds any securities in the company or received corporate
- Corporate and Criminal Fraud Accountability-Altering, destroying, concealing or falsifying records or documents with the intent to influence a federal investigation or bankruptcy case is subject to fines and up to 20 years imprisonment. New audit workpapers must be retained for five years.
- Attorneys’ Responsibilities-There are now minimum standards of professional conduct for attorneys representing public companies before the SEC. These include a rule requiring an attorney to report
HOW CAN WE HELP?
At Chartered House, we can help transform your SOX compliance to increase your business value by using an adaptable, flexible and robust approach to auditing. Our audit staff have a high level of expertise in the area of SOX compliance and will ensure that all controls are in place and operating effectively and compliantly. We can also help you stay informed of regulatory guidelines and change your companies accounting standard.