The Integrity News
Vol. XII No. 6
February 12, 2003
Vol. 13, Issue 2 (pgs. 14-20)
The Key Provisions of the Sarbanes-Oxley Act:
Establishes a new regulator, the five-member Public
Company Accounting Oversight Board, to register and
oversee public accounting firms.
( Sections 101-107 )
Bars a company's outside auditor from performing
many non-audit services for the company.
( Section 201 )
The lead audit partner and the reviewing partner
must rotate every five years.
( Section 203 )
Requires that all audit committee members be
independent. The audit committee appoints and
oversees outside accounting firms. It also has
the authority to engage counsel or consultants
to help it carry out its duties.
( Section 301 )
Requires companies to disclose whether one member
of the audit committee is a financial expert.
( Section 407 )
Requires CEOs and CFOs to sign off on the company's
financial statements and its internal controls. Possible
penalties for falsehoods: fines or jail time.
( Sections 302, 404, 906 )
Outside auditors must attest to the company's internal
( Section 404 )
If a company has to restate its financials due to
"material non-compliance" with reporting requirements,
its CEO and CFO have to give back any bonuses or
incentive- or equity-based compensation, as well as
any profits from selling company stock, they received
in the 12 months following the filing of the financials.
( Section 305 )
Officers, directors, and other insiders are prohibited from
trading company stock during pension-fund blackout periods.
( Section 306 )
The Act bars companies from extending credit to executive
officers and directors.
( Section 402 )
Requires faster filing of Section 16 forms detailing
transactions by executive officers and directors.
( Section 403 )