Читать книгу Reading Financial Reports For Dummies - Lita Epstein - Страница 60

In addition to the new requirements for CEOs and CFOs, Sarbanes-Oxley changed other aspects of corporate reporting:

 Established the Public Company Accounting Oversight Board (PCAOB; https://pcaobus.org). This is an independent regulator of auditors of public companies and brokers. The PCAOB has the authority to inspect the operations of these entities in addition to enforcement and standard-setting authority.BEARING THE BURDEN AND EXPENSE OF SARBANES-OXLEYMany major corporations already had the internal controls in place and produced the documentation that the Sarbanes-Oxley Act required. Smaller companies were hit harder with these new requirements. The SEC's only concession for smaller companies was when they must be in compliance with the new rules on internal controls: All small businesses had to be in compliance by November 2004.The rules imposed by Sarbanes-Oxley were such a significant burden on small companies that some of them decided to buy out shareholders and make the companies private again, or merge with larger companies, or even liquidate.When a private company thinks about going public, it must consider whether the process is worth the costs. With the new Sarbanes-Oxley rules in place, a small company pays close to $3 million in legal, accounting, and other costs of being public. Before Sarbanes-Oxley, these costs totaled closer to $2 million. Nowadays, large corporations budget more than $7 million to cover the costs of being a public company.

 Strengthened audit committees and corporate governance. Corporate audit committees must now be independent of management for all public companies. The audit committee also has sole authority for the appointment, compensation, and oversight of the external auditor. Every audit committee is required to have at least one financial expert on the committee and the expert’s identity must be disclosed.

 Mandated that auditors must now attest to management’s effectiveness of internal controls over financial reporting.

 Established the “Fair Funds” program at the SEC, which provides a source of funds to compensate victims of securities fraud.