An Introduction to the Sarbanes-Oxley Act
The Sarbanes-Oxley Act contains eleven sections, ranging from specified Corporate Board responsibilities to criminal penalties. It created the PCAOB, or Public Company Accounting Oversight Board, which is an agency to regulate, oversee, inspect, and disciple accounting firms with respect to their public company audit role.
Essentially, the act:
Required that public companies evaluate and disclose the effectiveness of their financial reporting internal controls and that independent auditors attest to this.
Required certification of financial reports by CEO's and CFO's
Required that companies listed on stock exchanges have fully independent audit committees t
Required auditor independence
Accelerated the reporting of insider trading, and Prohibited insider trades during pension fund blackout periods
Enhanced the potential penalties for violations of securities laws and for willful misstatement of financial statements
Offered employee protections for corporate fraud whistleblowers