Several types of documents that a company files with the SEC include information about the company's executive compensation policies and practices.
Background[ edit ] InSarbanes—Oxley was named after bill sponsors U. Oxley R - OH. As a result of SOX, top management must individually certify the accuracy of financial information.
In addition, penalties for fraudulent financial activity are much more severe. Also, SOX increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements.
These scandals cost investors billions of dollars when the share prices of affected companies collapsed, and shook public confidence in the US securities markets. It created a new, quasi-public agency, the Public Company Accounting Oversight Boardor PCAOB, charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies.
The act also covers issues such as auditor independence, corporate governanceinternal control assessment, and enhanced financial disclosure. Bush signed it into law, stating it included "the most far-reaching reforms of American business practices since the time of Franklin D.
The era of low standards and false profits is over; no boardroom in America is above or beyond the law.
Opponents of the bill have claimed it has reduced America's international competitive edge against foreign financial service providers because it has introduced an overly complex regulatory environment into US financial markets.
Charles SchumerD-NYcited this as one reason America's financial sector is losing market share to other financial centers worldwide.
It also creates a central oversight board tasked with registering auditors, defining the specific processes and procedures for compliance audits, inspecting and policing conduct and quality control, and enforcing compliance with the specific mandates of SOX. Auditor Independence Title II consists of 9 sections and establishes standards for external auditor independence, to limit conflicts of interest.
It also addresses new auditor approval requirements, audit partner rotation, and auditor reporting requirements. It restricts auditing companies from providing non-audit services e. Corporate Responsibility Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports.
It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports.
It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section requires that the company's "principal officers" typically the Chief Executive Officer and Chief Financial Officer certify and approve the integrity of their company financial reports quarterly.
It describes enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers. It requires internal controls for assuring the accuracy of financial reports and disclosures, and mandates both audits and reports on those controls.
It also requires timely reporting of material changes in financial condition and specific enhanced reviews by the SEC or its agents of corporate reports. Analyst Conflicts of Interest Title V consists of only one section, which includes measures designed to help restore investor confidence in the reporting of securities analysts.
It defines the codes of conduct for securities analysts and requires disclosure of knowable conflicts of interest. Commission Resources and Authority Title VI consists of four sections and defines practices to restore investor confidence in securities analysts.
It also defines the SEC's authority to censure or bar securities professionals from practice and defines conditions under which a person can be barred from practicing as a broker, advisor, or dealer.If looking for the book Law Express Question and Answer: Company Law (Q&A Revision Guide) (Law Express Questions & Answers) by Fang Ma in pdf form, then you have come on to correct website.
Company Law Revision (Directors’ Duties) March 12, Additional Questions on Directors Duties Zone B Question 5 Glo al Va atio s Pl Glo al o s 51% of the shares i Easter Ad e tures Ltd Easter, a o pa that spe ialises i orga isi g holida s to Chi a.
Last ear, Glo al arra ged for Bo to e. Based in Alpharetta, CA, our CPA firm offers a full range of accounting and tax preparation services. Let us show you how we can help you. Tour Start here for a quick overview of the site Help Center Detailed answers to any questions you might have Meta Discuss the workings and policies of this site.
Updated with Rules, Notifications, Circulars and Orders till November 16, , all presented at one place under the relevant section of Companies Act, Revision Seminars in Toronto: Since , QED Law has provided revision seminars in London for students studying the University of London International Programmes LLB.