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What Is Sarbanes-Oxley?

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What Is Sarbanes-Oxley?

McGraw-Hill,

15 min read
9 take-aways
Audio & text

What's inside?

Alert to corporate board members: the Sarbanes-Oxley Act changes your job, legal liability and attorney confidentiality.

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Editorial Rating

7

Qualities

  • Applicable

Recommendation

This dry-as-bones handbook gives essential overview information about the numerous, varied requirements of the US Sarbanes-Oxley Act (SOA). Reading it is much easier than reading the Act itself, mainly because the book is much shorter. Expert author Guy P. Lander probably comes as close as possible for a practicing securities law attorney to writing in plain English. That does not mean that this book will appeal to the general reader. It will see its best service as a handy reference on the bookshelves of executives responsible for discussing their firms’ SOA compliance efforts with their attorneys, auditors and peers.

Summary

The US Sarbanes-Oxley Act, passed in 2002, sets corporate financial regulations.

The Sarbanes-Oxley Act (SOA), passed in July 2002, is a major piece of legislation that changes existing U.S. corporate law in several important respects:

  • It sets a higher standard for the audit committee of the board of directors.
  • It sets new standards for the independence of auditors.
  • It requires more disclosure of off-balance sheet transactions.
  • It requires Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs) to certify the accuracy of corporate financial reports and exposes them to possible criminal penalties including fines as high as $5 million and imprisonment for as long as 20 years.
  • It requires management and auditors to assess internal controls annually.
  • It requires disclosure within two days of the sale or purchase of stock by insiders.
  • It requires disclosure of some information in real time.

It requires CEOs and CFOs to guarantee the accuracy of financial reports and subjects them to long prison terms and stiff fines if they fail to comply.

Under Sarbanes-Oxley, companies must divulge...

About the Author

Guy P. Lander is a partner specializing in corporate and securities law at Davies Ward Phillips & Vineberg, LLP, in New York City. He is the author of U.S. Securities Law for International Financial Transactions and Capital Markets and Resales of Restricted Securities under SEC Rules 144 and 144A. He is the former chairman of the New York Bar Association’s Committee on Securities Regulation and of its Section on Business Law.

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