The Sarbane-Oxley Act (SOA)

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INTRODUCTION "The Public Company Accounting Reform and Investor Protection Act" was signed into law by President Bush on July 30, 2002. The law is now known as The Sarbane-Oxley Act (SOA). The SOA has eleven titles within the act and numerous sections, pertaining to ethics, accounting, financial reporting, responsibilities of officers, whistleblower protection, and increased criminal penalties built upon prior securities laws. SOA is the most comprehensive securities legislation written since the 1940s. In the early part of the twentieth century companies did not have the sophistication and abilities of the modern company in regard to information technology, number of accountants, advisors and analysts. This legislation is a big step toward keeping U.S. law up to date with modern business practices. The Sarbane-Oxley Act was necessary to protect the U.S. economy and restore investor confidence after the many years of dishonest business practices by ENRON, WORLDCOM, TYCO and other companies. The practitioners of shady accounting and greed brought about a collapse in stock prices, shook investor confidence and hurt the credibility of all publicly traded companies. A mass "bail-out" by large stockholders ensued; however the average small investor held on, hoping that the stock would stabilize and believing the reassurances of companies, that claimed they were financially well-off when they were actually worth less than what they owed. In the end, investors and lower-rung employees of these companies were devastated financially. The underhandedness and greed of these corporate officers had the potential to hurl the U.S. economy out of control. The small investors, who are registered voters demanded action. This paper will review the sections of The Sarbane-Oxley Act, highlight their broad implications and discuss compliance. Compliance will cost all publicly traded companies a great deal of money. ?Deloitte's Point of View? will be used to illustrate that compliance, when embraced properly and approached positively can bring rewards for companies in the long term. SECTIONS The sections that follow are a simplification of the Sarbane-Oxley legislation. There are many niches that will require attorneys, accountants and advisors. Keep in mind all prior SEC (securities exchange commission) legislation such as (The Securities Act of 1933, Securiti... ... middle of paper ... ...s Point of View, Sarbanes-Oxley Compliance. (Online). 8 Pages. Retrieved January 16, 2003 from: http://www.deloitte.com/dtt/section_node/0%2C2332%2Csid%25253D5601%2C00.html PriceWaterhouseCoopers. (2003). Key Elements of Antifraud Programs and Controls, A White Paper. 29 Pages (Online). Retrieved January 16, 2003 from: http://www.pwcglobal.com/Extweb/NewCoAtWork.nsf/docid/D0D7F79003C6D64485256CF30074D66C Securities and Exchange Commission. (2002). Proposed Rule: Certification of Disclosure in Companies? Quarterly and Annual Reports. 6 Pages (Online). Retrieved January 17, 2003 from: http://www.sec.gov/rules/proposed/34-46300.htm Securities and Exchange Commission. (2003). The Laws That Govern the Securities Industry. 5 Pages, (Online). Retrieved January 17, 2003 from: http://www.sec.gov/about/laws.shtml#secact1933 Securities and Exchange Commission. (2003). Summary of SEC Actions. 3 Pages, (Online). Retrieved January 17, 2003 from: www.sec.gov/news/press/2003-89a.htm Worthen B. (2003, December 1). A Funny Thing Happened on the Way to Compliance. CIO Magazine, Retrieved January 15, 2003 from: http://www.cio.com/archive/120103/oxley.html

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