B1: Corporate Governance - Sarbanes Oxley Act (SOX) - Important!

Question 1

Three focuses of SOX?

Answer 1

1. Corporate responsibility
2. Enhanced financial disclosure
3. Fraud

Question 2

SOX - Corporate Responsibility

Answer 2

1. Audit committee

2. CEO/CFO representation - sign/pay for restatetment

Question 3

SOX - Enhanced Financial Disclosure

Answer 3

1. Internal control - Section 404

2. Audit committee - at least 1 financial expert

Question 4

SOX - Fraud

Answer 4

1. Criminal penalties - 10 to 20 years in jail
2. Statute of limitations - earlier of 2 and 5 years
3. Whistle-blower protection

Question 5

White-collar offense?

Answer 5

Securities fraud - Sentencing Commission - aggravate or mitigate