Question

Discuss the major components of the Sarbanes-Oxley Act of 2002 and Corporate Governance?

Answer 1

The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance.

The Sarbanes-Oxley Act is arranged into eleven titles. As far as compliance is concerned, the most important sections within these are often considered to be 302, 401, 404, 409, 802 and 906.

An over-arching public company accounting board was also established by the act, which was introduced amidst a host of publicity.


Sarbanes-Oxley Compliance
Compliance with the legislation need not be a daunting task. Like every other regulatory requirement, it should be addressed methodically, via proper analysis and study.

Also like other regulatory requirements, some sections of the act are more pertinent to compliance than others. To assist those seeking to meet the demands of this act, the following pages cover the key Sarbanes-Oxley sections:

• Sarbanes-Oxley Section 302
• Sarbanes-Oxley Section 401
• Sarbanes-Oxley Section 404
• Sarbanes-Oxley Section 409
• Sarbanes-Oxley Section 802