Scenario: The Sarbanes-Oxley Act (SOX) has been in effect since 2002 and has cost businesses millions of dollars in personnel and administrative costs. Your company is in the process of "going public," has underwritten its Initial Public Offering (IPO), and filed its registration statement with the Securities Exchange Commission. Your current executive team has asked you to create a plan ensuring SOX compliance is followed once you become a publicly traded company.
Review the pertinent sections of The Sarbanes-Oxley Act (SOX) Act. For purposes of this proposal to the board, only concern yourself with the compliance provisions of SOX
Create a maximum 1,050-word proposal to the board outling the compliance project necessary to implement SOX.
Supportyour answers using legal terms
Format your paper consistent with APA guidelines.You must use APA formatted headings to add organization to your paper. Use bold and centering for first-level headings and put second-level headings in bold at the left margin. Capitalize all major words in both headings and eliminate italics. Have a Summary or Conclusion used as a first-level heading.
Regulatory Compliance and Governance
Sarbanes-Oxley (SOX) was developed in the year 2002 due to many scandals from corporate financials that were reported. The Sarbanes-Oxley Act came into force in 2006 requiring all companies in the United States of America regardless of their sizes to implement and comply with its provisions. The act requires all companies to provide a comprehensive report before it stars its operations. Any company that fails to comply with the act faces a penalty charge of up to 1 million US Dollar and 10 years imprisonment. SOX act is made up of 11 sections but the important section that deals with compliance are; section 302, 404, 401, 409, and 802. However, section 404 has been seen as the difficult section for compliance because of new accountability standards incorporated to the section. The aim of this proposal is to come up with a compliance plan that ensures all section of SOX is adhered to.
Compliance section of SOX
Section 302: this section is also known as corporate responsibility for financial report. The aim of this section is to identify people who will be responsible for financial report within a company (Edwards, 2013). SOX act under this section recognizes that the CEO and CFO are the people who are responsible for all financial reports including accuracy, documentation and the control structure within the company. The company will be able to comply with this section of SOX by ensuring that people responsible with financial reporting are identified, documentation of accurate financial reports and submit the reports to responsible authority as required by SOX. The signing officer will be responsible for controlling all internal activities.
Section 401: This section has been stated under part IV of the SOX Act. It is also referred to as Enhance Financial Disclosure. This section is c...