An Introduction To Sarbanes Oxley 301 Legislation

Section 301 of Sarbanes Oxley legislation is generally referred as the 'whistleblower' provision. Sarbanes Oxley 301 is that section of the Sarbanes Oxley act that enforces the publicly traded companies to regulate a process to help manage the whistleblower complaints.

The Securities and Exchange Commission of the United States advised the implementation of this section. This section clearly mentions that companies that have been listed in this act must have audit committees. These audit committees must consist of independent auditors. This act also states that the audit officer is not free to accept any advice or consultancy. Nor any other form of compensatory fee from the issuer is allowed. The officer found violating this rule would be penalized. However, this clause wasn't there in the proposal, but the paper of 302 of Sarbanes Oxley act discusses this rule.

SOX 302 comes under the IIIrd title of the Sarbanes Oxley act. Section 302 of this act is related to the 'corporate responsibility for financial reports'. It has been stated in the Sarbanes Oxley act that the periodic financial reports should include certain certifications.

First of all the reports should be passed from the table of the signing officer. The signing officer must observe the report carefully.

The signing officer must certify that the report does not contain any objectionable material or untrue statements. Finally the financial statements and any other data or statements should reveal the accurate financial condition.

The act states that the signing officer will be held responsible for all the internal controls. It will be considered that the signing officers have evaluated the internal controls within the period of ninety days and have registered the reports of the findings.

This act requires the companies and organizations to prepare a managed list of the important points that are missing from the internal controls. A list to be prepared that mentions any frauds occurred in the organization by the employees that were concerned with the internal control activities. The act requires the authorities to mention any major change that has been made in the internal controls or associated factors that could have had an adverse impact on the company.

All publicly traded organizations have to incorporate several tools and programs for accounting and financial reporting in order to ensure Sarbanes Oxley Act compliance. These tools and programs have to be implemented to enable the organizations to record the reports of the financial situation honestly and accurately. Awareness is the key to Sarbanes Oxley compliance. The organization must arrange special Sarbanes Oxley seminar and Sarbanes Oxley Security training programs to make personnel aware of the new regulations. The Sarbanes Oxley 301 is one of the most important sections of this legislation with respect to the compliance. With the help of this section, the organizations are able to meet the standards established by the Sarbanes Oxley act and the companies are able to protect its stakeholders by protecting them from harassment and frauds.