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SERVICES OUTSIDE THE SCOPE OF PRACTICE OF AUDITORS
auditors of public companies are now prohibited from providing nonaudit services to audit clients |
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| lead partner must rotate off an engagement after 5 years |
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| if auditor accepts a job with client, must also take a one year cooling off period |
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PUBLIC AUDIT COMMITTEES
public companies must have an audit committee as a subcommittee of the board of directors (must be independent of the company) |
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CORPORATE RESPONSIBILITY FOR FINANCIAL REPORTS
the CEO, CFO, and other responsible officers must submit a certified statement accompanying each annual and quarterly report |
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FAILURE OF CORPORATE OFFICERS TO CERTIFY THE FINANCIAL REPORTS
if section 302 is not complied with, stiff penalties may be applied (fines and/or prison) |
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DISCLOSURES IN PERIODIC REPORTS
a company must disclose any off-balance-sheet transactions |
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MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS
an internal control report must accompany each financial statement filing (most often based on COSO) |
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CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS
public companies must have a code of ethics covering its CFO and other key accounting officers |
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REAL-TIME DISCLOSURES
To protect investors certain information must be reported immediately (4 business days) |
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CRIMINAL PENALTIES FOR ALTERING DOCUMENTS
it is a felony to knowingly alter, destroy, falsify, or conceal any records or documents with the intent to influence an investigation |
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TAMPERING WITH A RECORD OR OTHERWISE IMPEDING AN OFFICIAL PROCEEDING
if a person violates 802, stiff penalties may apply (10-20 years prison) |
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PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED COMPANIES WHO PROVIDE EVIDENCE OF FRAUD
whistleblower protection provision of the act |
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