Question

"Revamping the Sarbanes-Oxley Act (SOX)"

Please respond to the following: We know that the Sarbanes-Oxley Act was created as the result of several high-profile fraud cases. Now that the act is over 10 years old, many think that it needs to be updated to reflect the changing times. From the e-Activity, identify and discuss at least three changes that should be made to the act, indicating why these changes are necessary. Create an argument supporting three items in the act that you would not change.

Answer 1

On July 30, 2002 President Bush signed a law- Sarbanes-Oxley Act of 2002 and the purpose of the act was to protect the shareholders, investors and the general public from accounting errors and fraudulent practices in the enterprise.

With the introduction of e-Activity their should be an improvement in communication. Communication breakdowns usually create barriers to SOX compliance, therefore the parties must strive to create open channels and lines of communication at all times. Most of the SOX audits result in financial and operational due to the miscommunication and a lack of understanding from each respective side. With this change there will be a healthy mix of experts on both sides of the who understand the framework of SOX, the and the ability to develop efficiencies in reporting and testing. Secondly, people too often fail to educate themselves on SOX through with e-activity they can train themselves in a more efficient approach. Thirdly, it is a time consuming and a costly exercise thus with e-activity can be helpful in reducing it.

The three items that should not be changed in the act are discussed as follows. These should not be changed for the soundness of management’s report and assessment on the state of the overall financial control system

Sarbanes–Oxley Section 802: This section states the criminal penalties for influencing US Agency proper administration or investigation. Whoever purposefully destroys, alters, mutilates, covers up, conceals, falsifies, or makes a fake entry in any document, record, or tangible object with an intent to obstruct, impede, or influence the proper administration or investigation of any matter within the any agency or department's jurisdiction of the United States or any case filed under title 11, or in relation to or contemplation of any such case or issue, shall be imposed fine under this title, imprisoned not exceeding 20 years, or both

　

2) Sarbanes–Oxley Section 1107: This section states the criminal penalties for retaliation against whistleblowers. Whoever purposefully, with the intent to retaliate, does any action harmful to any person, including livelihood of any person or interference with the lawful employment, for providing to a law enforcement officer any useful information in regard to the commission or possible commission of any federal offense, shall be imposed fined under this title, imprisoned not exceeding 0 years, or both

3) Sarbanes–Oxley Section 906: The section 906 addresses criminal penalties for certifying a fraudulent or misleading financial report. It states that 1) whoever certifies any statement knowing that the periodic report accompanying the statement does not comply with the set forth requirements shall be fined not exceeding $1,000,000 or imprisoned not more than 10 years, or both; or (2) wilfully certifies any statement knowing that the periodic report accompanying the statement does not comply with the set forth requirements as set in this section shall be fined not exceeding $5,000,000, or imprisoned not more than 20 years, or both.