Compliance Law | Description of Compliance Law | Rationale for Using this Law | FISMA | The act requires each federal agency to develop, document, and implement an agency-wide program to provide information security for the information and information systems that support the operations and assets of the agency, including those provided or managed by another agency, contractor, or other source. | FISMA was a way of protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction within federal agencies and their contractors. | SOX | SOX not only affects the financial side of corporations, it also affects the IT departments whose job it is to store a corporation's electronic records. The Sarbanes-Oxley Act states that all business records, including electronic records and electronic messages, must be saved for "not less than five years." | SOX was enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise.
SOX also sought to strengthen consumer and investor confidence and confidence in financial information by changing the auditing procedure and making management more accountable for fraud prevention, catching, and existence within the pot. Lastly, it shielded whistleblowers from corporate retribution and endowed them with protecting freedoms. Based on aforementioned information, I would like to consider the implementation of SOX would have been an immediate check to financial statement fraud in its initial launch in 2002; unfortunately, there will invariably be somebody who believes she is above reproach and disregards societal measures of intellect, decency and control to pursue her own
• SEC-Securities and Exchange Commission: The SEC’s purpose is to “serve as a repository and examiner for registration statements filed by companies planning to sell stock to the general public; providing information on securities to investors; advising on some bankruptcy reorganizations; and investigating and initiating action when federal securities laws are violated and frauds are committed.” The SEC’s job is to protect investors by regulating a policing the securities market. Friedrichs, David O. Trusted Criminals: White Collar Crime In Contemporary Society, 4th Edition. Cengage Learning, 06/2009. VitalBook file.
● ● Requires codes of ethics for senior financial officers. In addition, Section 404 of the Sarbanes-Oxley Act requires public companies to attest to the effectiveness of their internal controls over financial reporting. 29. Some major challenges facing the accounting profession relate to the following items: Nonfinancial measurement—how to report significant key performance measurements such as customer satisfaction indexes, backlog information and reject rates on goods purchased. Forward-looking information—how to report more future oriented information.
Section 409 of the SOX Act has been interpreted as meaning that when a material financial change occurs in a publicly held company, it must be reported to regulators within 48 hours (Addison-Hewitt Section 409). Disclosures are to be presented in terms that are easy to understand with the use of graphics where necessary. These easy to follow graphics and disclosure protect investors in real time from delayed reporting of material events. “Companies must also account for changes that occur externally, such as changes by customers or business partners that could materially impact its own financial positioning (e.g. key customer/supplier bankruptcy and default)” (Brief Summary 4).
This letter serves to provide Mr. Lancaster with an overview of section 404 and other regulations that relate to the audit of internal controls as well as a synopsis of internal control risks that have and will be identified within Apollo Shoes Inc. This letter will also describe the responsibilities of our firm in regards to detecting and reporting fraud. In the SOX act, Section 404 suggests all publically traded organizations need to establish
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
Under Section 404 of the act, these findings must detail any uncovered control deficiencies or instances of employee fraud, and must also be reviewed and attested by the registered accounting firm. The authors of the report must certify that the report does not contain any false information, misleading statements or significant omissions, and that the financial statements and information included in the report accurately represent the financial condition of the company. Under Section 401 of the act, this representation must account for both balance and off-balance sheet debts, obligations and transactions in order to facilitate maximum transparency for shareholders (Nikolas, Daniel. Nd Effects of the Sarbanes-Oxley Act). The act serves as a guideline and governs what an accountant should and should not do when reporting financial flows.
Riordan Industries shall have a policy covering standardized disciplinary guidelines for violations of the law or other affirmative misconduct and those guidelines shall be enforced consistently and uniformly. The standards set forth in the code of conduct are important to Riordan Industries and must be taken seriously by all Riordan employees, mangers, officers, and agents. Accordingly, violations of these standards will not be tolerated and, in accordance with company regulations and applicable laws, rules and regulations, will result in the imposition of appropriate discipline, up to and including termination. Sanctions imposed will reflect the seriousness of the offense and any unique circumstances of the situation. Any Riordan employee or officer potentially subject to sanctions will be given notice, an explanation of the sanctions imposed, an opportunity to explain the circumstances and events.
Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors and make one (1) suggestion for improvement. The Sarbanes-Oxley Act is been very effective especially by protecting investors and improving the accuracy and reliability of corporate disclosures, and much of the law seeks to further this goal by imposing strict rules for audits and auditors of publicly traded companies, prevent insider trading and deals, requiring companies to adopt strict internal controls, and increasing the penalties for white collar crimes relating to investor fraud. As a matter of fact, the Act effects dramatic change across the corporate area to re-established investor confidence in the integrity