Assignment Help - Foreign Companies 2455



  • I need a bit of ‘start up’ help with the question below. My understanding is that should any non USA company either invest or buy shares(stock) on the USA market, their auditors, which most likely be foreign, have to comply with the Act.
    The question is as follows:
    Following a number of corporate accounting scandals in the USA,
    Congress passed the Sarbannes-Oxley Act. Review the Sarbannes-Oxley
    Act and critically assess the requirements of the Act as they affect foreign
    companies (non-USA companies) with securities issued in the USA.
    Include an outline of how a foreign registered company should comply
    with the requirements of Sarbannes-Oxley.
    Some info would be appreciated



  • You got it all wrong.
    The Sarbanes-Oxley Act (SOA) mostly applies to companies (i.e. issuers of securities) that use the public capital market of the U.S. to raise financing. There are three categories of using the U.S. public capital market that trigger a registration of the security with the U.S. Securities and Exchange Commission and the applicability of most articles of the SOA:

    1. listing of the issuer’s securities on a national stock exchange in the U.S. (section 12(b) of the Securities Exchange Act)
    2. over-the-counter trading of the issuer’s equity securities in the U.S. (section 12(g) of the Securities Exchange Act)
    3. issuer’s securities have been publicly offered in the U.S. (Section 15(d) of the Securities Exchange Act in conjunction with the registration provisions in the Securities Act)
      Read the Act and the related SEC rules to look for any exemptions for foreign private issuers. Mostly there are no exceptions for foreign private issuers. However the whistleblower employment protection where the whistleblower can file a complaint against the termination of his employment with the U.S. Department of Labor only applies to U.S. companies (there were court cases that decided this issue).


  • I need a bit of ‘start up’ help with the question below. My understanding is that should any non USA company either invest or buy shares (stock) on the USA market, their auditors, which most likely be foreign, have to comply with the Act.
    The question is as follows:
    Following a number of corporate accounting scandals in the USA,
    Congress passed the Sarbannes-Oxley Act. Review the Sarbannes-Oxley
    Act and critically assess the requirements of the Act as they affect foreign
    companies (non-USA companies) with securities issued in the USA.
    Include an outline of how a foreign registered company should comply
    with the requirements of Sarbannes-Oxley.
    Some info would be appreciated
    gmerkl has addressed the first bit I highlighted.
    The second piece should probably say ‘their auditors, most likely to be one of the 4 large global audit firms’ 😉


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