Responsibilities under SOX. 1905

  • to take it one step further, do you know if there’s an easy way of dividing the different sections between the CEO, directors, audit C and Audit?
    SOX is more a blended responsibility than one easily segrated by Section names. For example, the accounting area may need to meet SOX 404 related controls for IT systems as well as work flow controls that are non-IT based to ensure separation-of-duties, checks-and-balances, and autonomy controls.
    Obviously 302 falls under the responsibility of the CEO but do U know which sections apply to whom?
    Most other areas have to do the detailed work to achieve everything needed for SOX 302 certifications by the CEO and CFO … Other directors may also commonly sub-certify (search on SOX sub-certifications here and via the internet)
    Is there any other specific role of the board that is crucial?
    The board needs assurances that the firm is meeting it’s SOX related responsibilities and major events are most likely shared in the meetings.
    what section applys to the responsibilities of the IT director?
    SOX 404 primarily applies to IT (security and Financial IT system controls)
    P.S. Below are numerous SOX links captured in another forum I belong to (the ‘101’ site is excellent):
    Paste to browser and add ‘www’

  • thx again for helping out, the link was great 🙂
    One last thing, could any violation of SOX be subject to santions other than stipulated within SOX?
    Is SOX exhausive on this matter? No other forms of punishment to consider?
    thx, Magnus

  • Consider market confidence (lack of) if a material misstatement or fraud is discovered during a Sox engagement as a punishment. I think it really has yet to be seen what will happen in the market for a company that has had these types of findings. Anyone with real life examples please share with the forum.

  • One last thing, could any violation of SOX be subject to sanctions other than stipulated within SOX? %0AYes, it may be possible that other laws were violated. SOX violations in some of the high-profile cases have lead to SEC penalties in the millions of USDUSDUSD as well.%0AJason also shared an excellent point on the loss of public confidence . %0AFor example in recent news, companies which have: (1) mistated past earnings, (2) are under SEC investigation, or (3) have violated SOX guidelines deliberately, have immediately declined in the stock market by 10% or more as soon as the news broke. That alone is enough to make me want to dot the 'i’s and cross the 't’s

  • Harry,
    Do you have a link to an article describing these losses in the recent news? Any information you can provide me would be greatly appreciated.

    Naturally the media plays a big role in carrying the message out to the people and the whole idea behind SOX was to create a more investor friendly market, so the reaction of the public is crucial. Aswell as keeping their confidence 🙂 good point.
    But as Ive been looking into soft law it seems like this is the only ‘sanction’ to poor behavior, of course certain stock-exchanges have certain rules that U have to be in compliance with in order to register your shares, but never the less, soft law lack in this area, or atleast, Im not quite satisfied.
    Is there any interresting cases that reflects the outcome of violations of 302 or in any other way?
    thx for helping me out fellas, Magnus

  • BTW - Don’t forget the IRS (as I saw in one of the links) which may also impose fines and penalties on any income mis-reportings …
    Below are a few links found in some quick searches :
    SEC Links - Investigation and Administrative links by year
    Please paste to browser and add www
    Recent Apple investigation caused a one-day decline but the stock rebounded after noting CEO did not benefit
    Please paste to browser and DO NOT add www
    United Healthcare and Vitesse - SEC probe on backdating stock options
    Please paste to browser and DO NOT add www
    Currently there are more than 125 corporations implicated in the scandal , including Brocade Communications (Charts) and Comverse Technology (Charts), which have received criminal indictments for their options practices.
    More firms listed
    Please paste to browser and DO NOT add www

  • Harry,
    Thanks so much.

  • OK, so where do you think Sox is in 5 years from now.
    Take for instance european companies, they’d rather register at London due to Sox and the costs of implementing it. Theres only two Swedish companies left in NY, all the others have unregistered, somthing which is becoming more and more common for european companies these days. And the Chinese arent even bothering, they just stay in Hong Kong.
    What do U reckon will happen in the future, whereto is it turning?
    Are there any initiatives on loosing it up a bit or whats the common opinion?
    Where does Sox go from here?
    thx, M

  • OK, so where do you think Sox is in 5 years from now … Where does Sox go from here?
    Hi - In using the search button above and by entering future , we’ve debated this quite a bit in the forums.
    Near term (2007 timeframe) – We hope that that Congress, the SEC, and other governmental entities make some of the projected SOX improvements (e.g., better clarity of the standards and other ways to reduce expenses). Some links are captured below:
    SOX - Some near term changes could take place in 2007
    Five years from now - Yes, I believe SOX is here to stay, as it’s unlikely our government will eliminate SOX requirements completely. SOX is essentially integrated into the SEC Act of 1934. Although some companies have went public to avoid the additional expense and overhead of SOX, I don’t think the numbers are there to cause the government to consider eliminating SOX altogether. As even bad laws are difficult and slow to change by our government, a somewhat beneficial program like SOX will be even more difficult to eliminate. Thus, I anticipate very little change over the next 5 years.
    SOX - Some good discussion threads on the ‘Future of Sox’

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