Sarbanes-Oxley Act

Summary

Enacted July 30 2002 Pub L 107-204 116 Stat 745

Official text From GPO website

Developments

SEC Chairman speech 9.19.06

Speech text

Free Enterprise Fund brings constitutional challenge

SOX Act Quick Finder

§
1-3	General Provisions Short title: "Sarbanes-Oxley Act of 2002" Section 1 Definitions Section 2 Securities Law Definitions SEC rules and enforcement Section 3
101-109	Public Company Accounting Oversight Board PCAOB established Section 101 Public company auditors to register with PCAOB Section 102 Standards for audits and auditor independence Section 103 Periodic inspection of registered auditors Section 104 Authority to investigate and discipline Section 105 Application to foreign auditors Section 106 SEC oversight of PCAOB Section 107 Authorizes accounting standards board (FASB) Section 108 Funding for PCAOB and FASB Section 109
201-209	Auditor Independence Prohibited non-audit services Section 201 Audit committee pre-approval Section 202 Audit partner rotation Section 203 Auditor reports to client's audit committee Section 204 Conforming amendments Section 205 Auditor employees joining client management Section 206 Study re: mandatory rotation of auditors Section 207 SEC regulatory and enforcement authority Section 208 Considerations by state regulators Section 209
301-308	Corporate Responsibility Enhanced authority for audit committees Section 301 CEO/CFO must certify periodic reports Section 302 Ban on improperly influencing audit Section 303 CEO/CFO forfeitures over financial restatements Section 304 SEC can bar unfit directors / officers Section 305 Pension fund blackout trading restriction Section 306 SEC rules for attorneys Section 307 Investor reimbursement fund Section 308
401-409	Enhanced Financial Disclosures Material correcting adjustments Section 401 Off-balance sheet arrangements Section 401 Non-GAAP financial measures Section 401 Ban on personal loans Section 402 Accelerated §16 reporting of insider trades Section 403 Internal controls Section 404 Investment company exemption Section 405 Codes of ethics Section 406 Audit committee financial experts Section 407 SEC review of periodic reports Section 408 Real time disclosures: Form 8-K changes Section 409
501-705	Miscellaneous Research analyst conflicts of interest Section 501 SEC appropriations Section 601 Barring auditors / attorneys from SEC practice Section 602 Barring persons from penny stock offerings Section 603 Barring persons from securities industry Section 604 Mandated studies Sections 701-705
801-807	Corporate and Criminal Fraud Accountability Act Short title Section 801 Retention of audit work papers for five years Section 802 Liabilities not dischargeable in bankruptcy Section 803 Extends statute of limitations for securities fraud Section 804 Changes to Federal Sentencing Guidelines Section 805 Whistleblowers may not be retaliated against Section 806 Defrauding public company shareholders Section 807
901-906	White-Collar Crime Penalty Enhancement Act SEC_CODE_REF_0090001192884 Short title Section 901 Criminalizes attempted crimes and conspiracies Section 902 Increases penalties for mail and wire fraud Section 903 Increases penalties for violating ERISA Section 904 Changes to Federal Sentencing Guidelines Section 905 CEO/CFO must certify periodic reports Section 906
1001	Signing of corporate tax returns by CEOs Precatory only Section 1001
1101-1107	White-Collar Crime Penalty Enhancement Act Short title Section 1101 Tampering with a record / Impeding an official proceeding Section 1102 SEC can freeze payments during investigations Section 1103 Changes to Federal Sentencing Guidelines Section 1104 Officer - director bars Section 1105 Increases Exchange Act criminal penalties Section 1106 Criminalizes retaliation against informants Section 1107

SEC FAQs

SOX Act FAQs 2002

Definitions Q1
Section 301 Q2
Section 302 Q3-Q24
Section 403 Q25-Q28

SOX Act-Mandated Studies

§ 108(d) Principles-based accounting - SEC

§ 207 Mandatory rotation of auditors - GAO

§ 308(c) Restitution / disgorgement - SEC

Statute

§ 401(c) Off-balance sheet arrangements - SEC

Statute

§ 701 Consolidation of auditors - GAO

Statute

§ 702 Credit rating agencies - SEC

§ 703 Violations by securities professionals - SEC

Statute

§ 704 Enforcement / Restatements - SEC

§ 705 Investment banks / Enron - GAO

Statute

Constitutional Challenge

Free Enterprise Fund brings constitutional challenge

Claims that establishment of PCAOB violates appointments clause and separation of powers

Lawyers involved include Jones Day and Kenneth Starr
FEF webpage
DOJ and SEC file opposing brief

SEC press release 9.01.06
Brief

US District Court dismisses complaint

Opinion 3.21.07

Commentaries

On one -year anniversary:

Law firm commentaries:

Application to voluntary filers

Latham & Watkins 2003

Application to foreign private issuers

Fried Frank 2003

Application to private equity funds

Akin Gump 2002

SEC Staff Speeches

Director of Corporation Finance 2007

With comment period closed on Commissions top down and risk-based management guidance proposal, and the PCAOBs proposed standard to replace Auditing Standard No. 2, division staff hopes that both will be available for year-end 2007 reports

Commentaries on specific SOX Act provisions can also
be found on the relevant Lawyer Links topic page

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