Federal Reforms

March 1, 2003

1 Min Read
Federal Reforms

Originally Published MX March/April 2003

GOVERNMENTAL & LEGAL AFFAIRS

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002. The act effects changes in Securities Exchange Commission (SEC) regulations in response to the recent well-publicized corporate scandals and stock market declines. Principal components of the act include the following.

  • Increased issuer and management disclosure.

  • Enhanced corporate governance rules and responsibilities.

  • Mandated auditor independence.

  • Creation of the Public Company Accounting Oversight Board.

  • New and enhanced fraud and criminal penalties.

  • Substantial regulations regarding audit committee procedures.

An area of the act that has attracted a significant amount of the spotlight is the requirement that the CEOs and CFOs of publicly traded companies must certify each filed annual report, each quarterly report, and each filed periodic report containing financial statements.

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