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SARBANES-OXLEY ACT OF 2002. Presented by: Julie M. Allen jallen@proskauer.com 212.969.3155. Sarbanes-Oxley Act. Enacted July 30, 2002 Response to decline in public trust Corporate and accounting scandals—Enron, Tyco, Worldcom and others. New or enhanced standards
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SARBANES-OXLEY ACT OF 2002 Presented by: Julie M. Allen jallen@proskauer.com 212.969.3155
Sarbanes-Oxley Act • Enacted July 30, 2002 • Response to decline in public trust • Corporate and accounting scandals—Enron, Tyco, Worldcom and others File Number and Name
New or enhanced standards • Public company boards and management • Public accounting firms File Number and Name
Administered by: • Securities and Exchange Commission • Stock exchanges • Public Company Accounting Oversight Board File Number and Name
Primary Focus of the Regulations • Auditor Independence • Corporate governance and responsibility • Financial disclosure • Internal controls File Number and Name
Auditor Independence • Prohibition on non-audit services • Preapproval of services by the audit committee • Rotate lead auditing partner every five years • Independence of auditing firm from issuer File Number and Name
Corporate Governance and Responsibility • Independent Audit Committee • Corporate whistleblowing • Executive officer certification of periodic reports • Disgorgement of bonus or incentive compensation in the event of restatement of financials • Loans to executives prohibited File Number and Name
Enhanced Financial Disclosure • Disclosure of off-balance sheet arrangements • Trading by insiders to be reported within 2 business days • Code of Ethics for senior financial officers • Enhanced real-time disclosure of material events File Number and Name
Section 404—Internal Controls • Internal control assessment by management and report • Auditor attestation • Most controversial aspect of SOX File Number and Name