Some Important Sarbanes Oxley Rules

The Sarbanes Oxley act was signed in 2002. The emergence of this act was the result of the corporate and the accounting scandals that were arising due to the lack of the trust of the public in the reporting procedures and activities. This legislation has certain rules and provisions. Some of the major Sarbanes Oxley rules have been stated below.

The most important rule is the implementation of Updated filer manual. Under this rule, the Securities and Exchange Commission is required to adopt the revisions to the EDGAR filer manual. This helps to portray the updates made to the EDGAR system to enhance the SEC's online forms and websites functionality.

A new final rule which refers to the management's report for the structure of the internal control and the procedures of financial reporting is also implemented. It has become necessary to certify the disclosure of periodic reports in exchange acts. This section deals with Sarbanes Oxley compliance. The companies are required to report the requirements of the SEC act of 1934. The companies are also required to mention the management of company's internal control over the financial reporting in their annual reports.

Improper influence on conduct of audits has been one of the major loophole leading to corporate scandals. According to section 303 of the Sarbanes Oxley legislation, officers and directors of an issuer are prohibited from taking any such action that tend to mislead or manipulate the auditor of the issuer's financial statement. If the act is done intentionally, the person is subjected to penalty.

Mandated electronic filing and website posting has been introduced to ensure global availability of the information. Under this rule, the SEC attempts to adopt revisions to the EDGAR filer manual. This effort is being made to showcase the EDGAR system that is based upon mandating the electronic filing and posting by the website issuers.

Finally an acceleration of periodic report filing dates and disclosure concerning website access to the reports has been introduced. In this document, the connections to the final rule are contained. These rules were published in the Federal Register on 16 September 2002 and are related to the acceleration of the quarterly as well as annual reports under Securities Exchange act of 1934.

These are some of the major rules of the Sarbanes Oxley act. These rules are very important for the governance of the internal control procedures and the financial reporting of the corporate. These rules have helped to lay a foundation of this act and govern the policies as well as dealings of the public companies.

This act is also important with respect to the compliance. The Securities and Exchange Commission administers the compliance and prescribes the deadlines to meet these compliances. SEC also publishes the rules and requirements of the compliance.

This act is not meant to give outlines on how to manage and govern business but helps to manage the records and gives the time period for which these records should be maintained. This act has laid down certain Sarbanes Oxley rules for the compliance and if the corporate do not follow them, they are penalized with fine or even imprisonment. The rules set by this act are very beneficial and have helped to achieve clean and successful business as well as customer satisfaction.

Please note that we have just provided a Sarbanes Oxley summary for quick reference. There are a number of Sarbanes Oxley articles in legal journals and on legal websites. You can also refer to Sarbanes Oxley FAQ if you want more information.