SOX: Sarbanes-Oxley Act of 2002

In this section of the Act it mainly concentrates on the corporate responsibility especially when dealing with financial reports. In this the periodic statutory financial reports that are given must include certifications that indicate the officers who reviewed the report and signed it. The officers have to ensure that the report given does not have any materials that may have false statements or omitted other information hence resulting in a misleading perception. The financial statements that are given and its related information needs to give a fair view of the scenario of financial conditions and in all material aspects that are involved. The signing officers in every have the responsibility for internal controls and need to evaluate the controls in place within the previous 90 days and give a report in the same. Besides in the case of any deficiencies on the internal control or information on fraud, the employees who are involved must also be named. Also stated include any changes in internal controls that may be significant enough to impact negatively on the internal controls.

Section 401

In this section of the Act, the main issue is the disclosure that needs to be in the periodic reports that are submitted. Hence the financial information that is published by issuers needs to be accurate and be presented in a manner that does not include any statements that are incorrect or may state some material information. In the financial statements included are the material off-balance sheet liabilities and any transactions or obligations. The commission that was formed is required to carry out a study and give a report on the degree of off-balance transactions that arise due to transparent reporting. In addition the commission needs to determine if the generally accepted principles in accounting or any other regulations used result in open or meaningful reporting by the issuers.

Section 404

This section mainly concentrates in the management Assessment that is used in internal controls. The people who are in charge of issuing the reports are required to publish information in the annual reports that concerns the scope and adequacy of the internal control structure and procedures normally used in the process of financial reporting. Such a statement involves the assessment of the effectiveness of some of the controls and procedures used. The accounting firm will in the same report attest to and give a report on the assessment of the effectiveness of the internal controls being used and including the structures in place for the financial reporting.

Section 409

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