This section is of course listed under Title III of the act, and pertains to ‘Corporate Responsibility for Financial Reports’
Summary of Section 302
Periodic statutory financial reports are to include certifications that:
- • The signing officers have reviewed the report
- • The report does not contain any material untrue statements or material omission or be considered misleading
- • The financial statements and related information fairly present the financial condition and the results in all material respects
- • The signing officers are responsible for internal controls and have evaluated these internal controls within the previous ninety days and have reported on their findings
- • A list of all deficiencies in the internal controls and information on any fraud that involves employees who are involved with internal activities
• Any significant changes in internal controls or related factors that could have a negative impact on the internal controls
Organizations may not attempt to avoid these requirements by reincorporating their activities or transferring their activities outside of the United States
This section is of course listed under Title IV of the act (Enhanced Financial Disclosures), and pertains to ‘Disclosures in Periodic Reports’.
Summary of Section 401
Financial statements are published by issuers are required to be accurate and presented in a manner that does not contain incorrect statements or admit to state material information. These financial statements shall also include all material off-balance sheet liabilities, obligations or transactions. The Commission was required to study and report on the extent of off-balance transactions resulting transparent reporting. The Commission is also required to determine whether generally accepted accounting principals or other regulations result in open and meaningful reporting by issuers.
This section is listed under Title IV of the act (Enhanced Financial Disclosures), and pertains to ‘Management Assessment of Internal Controls’.
Summary of Section 404
Issuers are required to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.
The registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.
This section is listed within Title IV of the act (Enhanced Financial Disclosures), and pertains to ‘Real Time Issuer Disclosures’.
Summary of Section 409
Issuers are required to disclose to the public, on an urgent basis, information on material changes in their financial condition or operations. These disclosures are to be presented in terms that are easy to understand supported by trend and qualitative information of graphic presentations as appropriate.
This section is listed within Title VIII of the act (Corporate and Criminal Fraud Accountability), and pertains to ‘Criminal Penalties for Altering Documents’.
Summary of Section 802
This section imposes penalties of fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects with the intent to obstruct, impede or influence a legal investigation. This section also imposes penalties of fines and/or imprisonment up to 10 years on any accountant who knowingly and wilfully violates the requirements of maintenance of all audit or review papers for a period of 5 years