Explain How The Sarbanes-Oxley Act Is Likely To Affect The Ceos

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Discuss how the Sarbanes-Oxley Act is likely to affect the CEO's and CFO's of public companies. The Sarbanes-Oxley Act Section 302 Rules 13a-15(a) and 15d-15(a) under the Exchange Act: Corporate Responsibility for Finical Reports requires that a statement be prepared to accompany the audit report signed by the CEO's and CFO's of public companies to certify that that the reports their companies file with the Securities and Exchange Commission are both accurate and complete and certified stating it’s "appropriateness of the financial statements and disclosures contained in the periodic report, and that those financial statements and disclosures fairly present, in all material respects, the operations and financial condition of the issuer." (White & Case LLP, 2003). The CEO/ CFO of public companies are required to have full knowledge of the SEC standard, pledging ignorance is not an option, if they do not meet their obligations under section 302, they can be found liable and can face litigation that could include a forfeiture of pay and bonuses under…show more content…
In addition, if a CEO/ CFO do not meet these requirements they can be criminally sanctions; which could include jail time reach up to 20 years if found guilty of willful neglect. Furthermore, a CEO/ CFO must understand the implications of section 303 in that improper influence or misleading of auditors can also render finical statements misleading, it is therefore to the CEO/CFO’s advantage to hire and retain highly capable and ethical auditors to ensure the company’s accuracy financial reporting, it is the CEO/CFO’s responsibility to set up “internal control over financial reporting” (White & Case LLP, 2003). The auditors responsible must ensure the internal controls

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