Daily Law Group
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Provisions of the Sarbanes-Oxley Act

As the CEO of a public corporation in California, you understand that the federal government has created rules and regulations and established oversight for securities trading through the Sarbanes-Oxley Act of 2002, or SOX. At the Daily Law Group, we are well-versed in the provisions of this federal law, including how these elements may affect corporations.

Per AccountingTools, Inc., SOX protects investors from corporate fraud through its provisions regarding your company's financial statements. These statements include reports on your financial results, condition and cash flows. These are some of SOX's primary provisions:

  • You and your company's CFO must both certify the accuracy of your company's financial statements
  • No one in your company may improperly influence how your audits are conducted
  • You must disclose the assets and liabilities that do not appear on your balance sheet
  • Your company's auditors have to certify the reliability of the internal controls you establish, as well as your reports on the scope and accuracy of the controls
  • If anyone in your company falsifies, destroys or steals records, you face substantial fines
  • If a whistleblower in your company exposes illegal activity, you must not retaliate against him or her

These and other provisions do reassure the public and may keep corporations from unethical practices. Unfortunately, they can also make it more difficult for corporations due to the increased expense the requirements impose, particularly in relation to the section dealing with internal control systems. 

You can find more information about corporate law matters and legal solutions by visiting our webpage.

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