Sarbanes Oxley

Question 1

What is the purpose of PCAOB/Sarbanes Oxley?

Answer 1

To protect the interests of investors and further the public interest in the preparation of informative, fair & independent audit reports.

Question 2

Section 101 of SOX, gives the PCAOB the power to:

Answer 2

Register public accounting firms.

Set standards for auditing, quality control, ethics, independence and other standards.

Conduct inspections of registered public accounting firms.

Conduct investigations & disciplinary proceedings.

Question 3

Criminal Penalties and Protection to Whistleblowers

Answer 3

Failure to maintain work papers for 5 years - felony/10 years in prison

Document destruction - felony/20 years

Securities fraud - 25 years

Fraud Discovery - statute of limitations is extended to 2 years from date of discovery and 5 years after the act (used to be 1 year and 3 years).

Question 4

Section 302 of SOX

Answer 4

CEO/CFO required to certify and approve the integrity of their company financial reports each quarter.

Question 5

Section 404 of SOX

Answer 5

Additional attention directed to internal controls design, implementation and effectiveness.