MBA 560 Week 5 Version 2

MBA 560 Week 5 Version 2 - Corporate Compliance...

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Corporate Compliance Benchmarking 1 Running head: CORPORATE COMPLIANCE BENCHMARKING Corporate Compliance Benchmarking Miranda Barrett-Williams, Diane Booker, Sabrina Henderson, Steven Strother, Tammy Wortherley MBA 560 – Enterprise Risk Trina Eaddy July 13, 2009
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Introduction Key Findings Identify corporate governance concepts Identify the role of stakeholders in the corporate governance process Explain how failures in corporate governance lead to regulatory action Describe the provisions of Sarbanes-Oxley - Tammy Wortherley The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 30, 2002), “also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002, as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom” (Wikipedia, 2009).
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The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Sarbanes-Oxley Act has 45 summary provisions and three titles, however, one that is most key and must be followed is: Section 101: Establishment; Duties of the Board. “Section 103: Auditing, Quality Control, and Independence Standards and Rules. The Board shall: (1) register public accounting firms; (2) establish, or adopt, by rule, "auditing, quality control, ethics, independence, and other standards relating to the preparation of audit reports for issuers;" (3) conduct inspections of accounting firms; (4) conduct investigations and disciplinary proceedings, and impose appropriate sanctions; (5) perform such other duties or functions as necessary or appropriate; (6) enforce compliance with the Act, the rules of the Board, professional standards, and the securities laws relating to the preparation and issuance of audit reports and the obligations and liabilities of accountants with respect thereto; (7) set the budget and manage the operations of the Board and the staff of the Board” (AICPA, 2009). However, with any business, a company should look at 15 provisions that require significant review: 1. Financial records – detailed financial records must exist. 2. Work papers – All audit paperwork must be retained for five years. 3. Document destruction – No destroying of any federal or bankruptcy paperwork. 4. Fraud discovery – Statute of two years from the date of discovery and five years after the act.
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5. Securities fraud penalty – 25 years for securities fraud. 6.
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MBA 560 Week 5 Version 2 - Corporate Compliance...

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