B sox section 404 sarbanes oxley also strengthened a

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b. SOX Section 404 Sarbanes-Oxley also strengthened a company’s required disclosures concerning the state of its internal control over financial reporting. Under Section 404, issuers are required to present in their annual reports management’s conclusion regarding the effectiveness of the company’s internal controls over financial reporting. This statement must also assess the effectiveness of such internal controls and procedures. In addition, the company’s independent auditor must attest to and report on its assessment of the effectiveness of the company’s internal controls over financial reporting. c. SOX Section 802
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Section 802 of Sarbanes-Oxley prohibits altering, destroying, mutilating, concealing, or falsifying records, documents, or tangible objects with the intent to obstruct, impede, or influence a potential or actual federal investigation. This section also prohibits any accountant from knowingly and willfully violating the requirement that all audit or review papers be maintained for a period of five years 41. Who is covered by the FCPA accounting provisions? The FCPA’s accounting provisions apply to every issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file annual or other periodic reports pursuant to Section 15(d) of the Exchange Act. These provisions apply to any issuer whose securities trade on a national securities exchange in the United States, including foreign issuers with exchange traded American Depository Receipts. They also apply to companies whose stock trades in the over-the-counter market in the United States and which file periodic reports with the Commission, such as annual and quarterly reports. 42. Can a) companies and b) individuals have criminal liability for failing to comply with the FCPA's accounting provisions? Explain. Criminal liability can be imposed on companies and individuals for knowingly failing to comply with the FCPA’s books and records or internal controls provisions. As with the FCPA’s anti-bribery provisions, individuals are only subject to the FCPA’s criminal penalties for violations of the accounting provisions if they acted “willfully.” For example, a French company was criminally charged with failure to implement internal controls and failure to keep accurate books and records, among other violations. As part of its deferred prosecution agreement, the company admitted to numerous internal control failures, including failure to implement sufficient anti-bribery compliance policies, maintain a sufficient system for the selection and approval of consultants, and conduct appropriate audits of payments to purported “business consultants.”Likewise, a German company pleaded guilty to internal controls and books and records violations where, from 2001 through 2007, it made payments totaling approximately $1.36 billion through various mechanisms, including $805.5 million as bribes and $554.5 million for unknown purposes.
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