Adopted Procedures 2767

  • Please forgive me if I am posting in the wrong place or this question has already been answered.
    I am trying to find out what section of the Sarbanes Oxley Act states that CEO’s of Companies cannot have access or write checks from the Companies bank accounts. Could someone please point me in the right direction?
    Also, is there a place where I can find the procedures that a company should adopt?
    Thank you in advance for your help.

  • None of the sections of the Sarbanes-Oxley Act and none of the rules of the Securities and Exchange Commission that implement the Sarbanes-Oxley Act forbid the CEO to have access to company bank accounts or to write checks that debit company bank accounts.
    Section 404 of the Sarbanes-Oxley Act requires the management of a company to annually assess the effectiveness of the company’s internal control over financial reporting. Internal control over financial reporting comprises measures to prevent or to timely detec MATERIAL erroenous or fraudulent misstatements in annual and quarterly consolidated financial statements (i.e. assurance of the quality of financial reporting).
    Most organizations that I have seen require dual signature for checks or for making transfers from bank accounts. In addition, payments that exceed certain limits may even require the upfront approval of the board of directors.
    A reconciliation of bank account movements to supporting documentation that authorizes payments may serve as a compensating control even if the CEO can make payments alone. However, as I mentioned previously this is rather rare in larger companies.

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