Sarbanes - Oxley Act

I begin learning Sarbanes - Oxley Act which was passed in 2002. The Act covers issues such as auditor independence, corporate governance and enhanced financial disclousre. Act comprises 11 titles,of whch for compliance, 302, 401, 404, 409, 802 and 906 are considerd to be most important. I think most of us often hear the word - 404. Yes, it is one of the most important parts of the Act.

Sarbanes Oxley Section 302 addresses all financial information disclosed to investors including MD&A in the 10Q and 10K.Under SOX Section 302, CEO and CFO must:

• Certify quarter and annual financial statements and other published financial information are fairly presented; no untrue facts or omissions.
• Establish and maintain disclosure controls and procedures as of period end and for disclosing material changes in internal control.
• Disclose to auditors and Audit Committee if control deficiencies, material weaknesses, or fraud exist.

Section 404 is a subset of Section 302 and addresses Financial Statement Reporting controls. Under 404, CEO and CFO must:

• Issue Internal Control Report in 2004 Company Annual Report
• Certify Quarterly as to effectiveness of Internal Controls over Financial Reporting beginning