India International Center for Corporate Governance

SOX Act 2002 – An Overview

The Serbians Oxley Act is an important achievement to address the issues related with corporate failures. By passing this act the quality of governance has improved and there by the investors confidence has been restored to a great extend. The provisions of this act prohibit non- audit services by the auditors and they are prohibited from providing non- audit services concurrently with audit/financial review services. The CEOs and CFOs are required to certify the reports filed with the Securities Exchange Commission of USA.

The act prohibits the US and foreign companies with securities traded within United States from making or arranging from third parties any type of personal loan to directors. The Attorneys dealing with the publicly traded companies are required to report evidence of material violation of securities law or breach of fiduciary duty or similar violations by the company or CEO. The acts provides that brokers and dealers of securities should not retaliate or threaten to retaliate an analyst employed by the broker or dealer for any adverse negative or unfavourable research report on a public company. The act does not distinguish between United States and non United States issuers (companies) and it applies to all companies with a listing in the United States of America.

- Team IICCG

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