Sarbanes-Oxley Act of 2002 Lawyers

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What Is The Sarbanes-Oxley Act Of 2002?

The Sarbanes-Oxley Act of 2002 is a law passed by Congress in response to the high profile Enron and Worldcom financial scandals. It was implemented to protect stockholders and the general public from accounting errors and fraudulent practices in the financial world. The Sarbanes-Oxley Act is not a set a business practices but rather rules on which financial records must be kept and for how long, as well as regulations on behavior by executives and upper management. This is enforced by the Securities and Exchange Commission (SEC), which sets deadlines on compliance and publishes rules on requirements. Punishments for non-compliance include heavy fines, imprisonment, or both.

What Are The Major Rules Under The Sarbanes-Oxley Act?

The Sarbanes-Oxley Act requires businesses to:

Do I Need an Attorney To Comply With The Sarbanes-Oxley Act?

The Sarbanes-Oxley Act is the most significant change to federal securities laws since the 1930s and includes very harsh penalties for non-compliance. Some of the new rules may require large modifications or even a complete overhaul of how your financial records are kept and maintained. Discussing the new rules with your attorney and planning on how to comply with Sarbanes-Oxley is recommended.

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Last Modified: 11-28-2011 04:21 PM PST

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