TreatiseTreatise

PLI's Guide to the Sarbanes-Oxley Act for Business Professionals

 by John T. Bostelman
 
 Copyright: 2005

 Product Details >> 

Product Details

  • ISBN Number: 9781402404336
  • Page Count: 196
  • Number of Volumes: 1
  •  

PLI’s Guide to the Sarbanes-Oxley Act for Business Professionals is an ideal source of practical information on this high-impact legislation — comprehensive yet concise, authoritative yet affordable.
 
John T. Bostelman, the author of PLI’s definitive three-volume Public Company Deskbook, has distilled the essence of this groundbreaking act, providing everything that a busy professional like you really needs to know about its reforms and the SEC and SRO rules in the wake of its passage.
 
Including only the legal terms and technical references that are necessary, the Guide gives you a working grasp of key provisions outlining required management certification of quarterly and annual reports; mandatory financial disclosure procedures and controls; ways of improving Management’s Discussion & Analysis; director independence rules and expanded director duties and responsibilities; increased audit committee powers and requirements; prohibitions on loans to insiders and on influencing audits; auditor independence rules and checks on auditor conflicts of interest; and rules for attorneys, including ”up-the-ladder ” reporting of corporate misconduct.
 
PLI’s Guide to the Sarbanes-Oxley Act for Business Professionals is important reading for every business professional and for general practitioners whose clients’ interests are impacted by this major legislation.
  Table of Contents
Chapter 1: Introduction
  • : Purpose of This Book1
  • : Scope of the Sarbanes-Oxley Act2
    • : Entities That Are Issuers3
    • : Entities That Are Not Issuers3
  • : Philosophy of the Sarbanes-Oxley Act3
  • : Background: Twelve Months Leading Up to the Sarbanes-Oxley Act4
    • : Enron5
  • : Enron’s Financial Collapse5
  • : Other Corporate Accounting Scandals7
  • : Regulatory Responses8
  • : Enactment of the Sarbanes-Oxley Act8
Chapter 2: Management Certifications
  • : Overview10
  • : Scope of Certification Rules10
    • : Companies Covered11
    • : Filings Covered11
  • : Content of Certification12
    • : Paragraph 1—Review12
    • : Paragraph 2—Material Accuracy13
    • : Paragraph 3—Fair Presentation of Financial Information13
    • : Paragraphs 4(a) and 4(c)—Evaluation of Disclosure Controls and Procedures14
    • : Paragraphs 4(b), 4(d) and 5—Internal Control Over Financial Reporting15
  • : Disclosure About Evaluation and Changes17
    • : Certification Paragraph 4(c) Disclosure About Evaluation of Disclosure Controls18
    • : Certification Paragraph 4(d) Disclosure About Changes to Internal Control Over Financial Reporting18
  • : Mechanics of Certification19
    • : Form19
    • : Signatures19
    • : Location and Submission20
  • : Certification Required by Section 906 of the Sarbanes-Oxley Act20
    • : Reports Covered20
    • : Content of Certification21
    • : Submission Method22
    • : Penalties22
  • : NYSE CEO Certification23
  • : References23
Chapter 3: Disclosure Procedures and Financial Controls
  • : Overview25
  • : Disclosure Procedures26
    • : Description of Required Procedures26
    • : Management Evaluation and Related Disclosure27
    • : Suggested Approach to Develop Procedures28
  • : Internal Control Over Financial Reporting31
  • : Annual Internal Control Reports32
  • : Quarterly Evaluation and Disclosure of Internal Control35
  • : Relationship of Disclosure Procedures and Financial Controls36
  • : References36
Chapter 4: Financial Disclosure: Management’s Discussion and Analysis
  • : Overview39
  • : SEC’s 2003 Guidance Regarding MD&A Disclosure40
    • : Overall Presentation of MD&A40
  • : Focus and Content of MD&A42
  • : Liquidity and Capital Resources43
  • : Additional General MD&A Recommendations46
  • : Off-Balance-Sheet Disclosures46
  • : Critical Accounting Policies47
  • : References48
Chapter 5: Disclosure of Non-GAAP Financial Measures
  • : Overview50
  • : Required Reconciliation in Public Announcements—Regulation G50
    • : Definition of a “Non-GAAP Financial Measure”50
    • : Required GAAP Reconciliation51
  • : Expanded Disclosure of Non-GAAP Information for SEC Filings52
    • : Required Disclosures in SEC Filings52
    • : Prohibited Disclosures in SEC Filings53
  • : Form 8-K Furnishing of Earnings Releases by U.S. Public Companies55
    • : Announcements That Are Covered55
    • : Relationship of 8-K Requirement to Other Non-GAAP Rules56
    • : Forty-Eight-Hour Exception56
  • : Limited Exceptions for Business Combinations and Non-U.S. Public Companies57
    • : Business Combinations57
    • : Non-U.S. Public Companies57
  • : References58
  • : Compliance Checklist: Non-GAAP Financial Measures59
Chapter 6: Real-Time Disclosures
  • : Overview62
  • : Expanded Form 8-K Disclosure Requirements62
    • : Overview62
    • : Entry into a Material Definitive Agreement64
    • : Termination of a Material Definitive Agreement64
    • : Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance-Sheet Arrangement64
    • : Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance-Sheet Arrangement65
    • : Costs Associated with Exit or Disposal Activities65
    • : Material Impairments65
    • : Notice of Delisting or Failure to Satisfy Listing Standards; Transfers of Listings66
    • : Unregistered Sales of Equity Securities66
    • : Material Modification to Rights of Security Holders66
    • : Restatement of Previously Issued Financial Statements66
    • : A Director Departs or Declines to Stand for Reelection67
    • : Principal Officers Retire, Resign or Are Terminated67
    • : A New Director Is Elected or New Principal Officer Is Appointed67
    • : Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year67
    • : Other 8-K Requirements68
  • : Shortened Deadlines for 10-K and 10-Q68
    • : Four-Year Phase-In Period68
    • : Enhanced Disclosure Regarding Website Access to Periodic and Current Reports69
  • : Increased SEC Review of Public Filings69
    • : Mandatory Three-Year Review69
    • : Special SEC Review in 2002 of Fortune 500 Companies69
    • : Public Release of Comment and Response Letters70
  • : References71
Chapter 7: Governance: Board of Directors
  • : Overview74
  • : Director Independence74
    • : NYSE Director Independence Rules74
  • : Nasdaq Director Independence Rules77
  • : Audit Committee79
  • : Nominating/Corporate Governance Committee79
    • : NYSE Requirements79
    • : Nasdaq Requirements80
    • : Proxy Statement Disclosure Regarding Nominating Committee Functions and Communications Between Security Holders and Boards of Directors80
    • : Shareholder Communications with the Board81
  • : Corporate Governance Guidelines81
  • : Compensation Committee82
    • : NYSE Requirements82
    • : Nasdaq Requirements82
  • : Proposed SEC Rules on Direct Shareholder Access to Company Proxy Materials to Nominate Directors83
  • : References84
  • : Compliance Checklist: Bright-Line NYSE and Nasdaq Independence Tests for Board of Directors of U.S. Listed Company85
Chapter 8: Governance: Audit Committee
  • : Overview88
  • : SEC Audit Committee Requirements88
    • : Companies Covered88
    • : SEC Audit Committee Independence88
  • : SEC Audit Committee Authority and Responsibilities90
  • : SEC Audit Committee Financial Expert Disclosure91
    • : Required Disclosure91
    • : Definition of Audit Committee Financial Expert92
  • : Additional NYSE Requirements93
    • : NYSE Independence and Other Qualifications93
    • : NYSE Audit Committee Authority and Responsibilities93
  • : Additional Nasdaq Requirements94
    • : Nasdaq Independence and Other Qualifications94
    • : Nasdaq Audit Committee Authority and Responsibilities95
    • : Approval of Related Party Transactions95
  • : Required Auditor Communications with Audit Committee95
  • : References95
  • : Compliance Checklist: Audit Committee of the Board of Directors97
  • : Compliance Checklist: Audit Committee Financial Expert100
Chapter 9: Other Director Governance Matters
  • : Codes of Ethics102
    • : SEC Code of Ethics Requirement102
  • : NYSE Code of Ethics Requirement103
  • : Nasdaq Code of Conduct Requirement103
  • : Shareholder Approval of Equity Compensation Plans104
    • : NYSE Rule on Shareholder Approval of Equity Compensation Plans104
    • : Nasdaq Rule on Shareholder Approval of Equity Compensation Plans105
    • : Disclosure of Equity Compensation Plan Information105
  • : Other NYSE Corporate Governance Rules106
    • : NYSE CEO Certification and Notice of Noncompliance106
    • : NYSE Public Reprimand Letters106
  • : Other Nasdaq Corporate Governance Rules106
    • : Nasdaq Notice of Noncompliance106
    • : Nasdaq Disclosure of Going Concern Qualifications107
  • : References107
  • : Compliance Checklist: SEC, NYSE and Nasdaq Code of Ethics Requirements108
Chapter 10: Governance: Executive Officers and Directors
  • : Overview111
  • : Shorter Deadlines for Ownership Reports by Insiders of U.S. Public Companies112
    • : Shorter Deadlines112
    • : Mandatory Electronic Filing and Website Posting113
  • : Prohibition on Loans to Officers and Directors113
  • : Benefit Plan Blackouts114
    • : Prohibited Insider Trades During a Blackout Period114
    • : Department of Labor Advance Notice Rule115
    • : Notice of a Blackout Period to Insiders and the SEC115
  • : Disgorgement for Restatements116
  • : Improper Influence on Conduct of Audits116
  • : SEC Temporary Freeze on Bonus and Special Payments117
  • : References117
Chapter 11: Auditor Independence and Safeguards Against Auditor Conflicts
  • : Overview120
  • : General Auditor Independence Principles120
  • : Evolution of Current Independence Rules122
  • : Prohibited Non-Audit Services123
    • : Bookkeeping and Related Services123
    • : Financial Information Systems Design and Implementation123
    • : Appraisal or Valuation Services, Fairness Opinions or Contribution-in-Kind Reports124
    • : Actuarial Services124
    • : Internal Audit Outsourcing124
    • : Management Functions124
    • : Human Resources125
    • : Broker-Dealer, Investment Adviser and Investment Banking Services125
    • : Legal Services125
    • : Expert Services125
    • : Tax Services125
  • : Audit Committee Pre-Approval126
  • : Financial, Business and Payment Relationships127
  • : Audit Partner Rotation127
  • : Employment Relationships128
  • : Prohibition on Audit Partner Compensation for Cross-Selling Non-Audit Services128
  • : Enhanced Disclosure128
  • : Consequences of Impaired Auditor Independence129
  • : Required Auditor Communications with the Audit Committee130
  • : Material Correcting Adjustments130
  • : Retention of Audit Work Papers131
  • : Improper Influence on Conduct of Audits131
  • : SEC Authority to Censure Accountants131
  • : References132
  • : Compliance Checklist: Auditor Independence Requirements, Including Prohibited Services and Relationships133
Chapter 12: Public Company Accounting Oversight Board
  • : Overview137
  • : Auditor Registration138
  • : Auditing, Quality Control and Independence Standards138
  • : Inspections of Registered Public Accounting Firms140
  • : Investigations and Disciplinary Proceedings140
  • : Non-U.S. Public Accounting Firms141
  • : Organization and SEC Oversight of PCAOB141
  • : Funding of PCAOB and FASB141
  • : References142
Chapter 13: Attorney Professional Responsibility
  • : Overview143
  • : Covered Attorneys144
  • : Reporting Trigger145
  • : Reporting Procedures146
    • : Obligations of Chief Legal Officer147
    • : Further Reporting147
    • : Qualified Legal Compliance Committee148
    • : Reporting Obligations of Investigatory and Defense Counsel148
    • : Permissive Reporting Beyond the Public Company149
  • : Noisy Withdrawal Proposals149
  • : References150
  • : Compliance Checklist: Attorney Up-the-Ladder Reporting151
Chapter 14: Employee Whistleblower Protection
  • : Overview153
  • : Procedure154
  • : Remedies154
  • : Related Criminal Whistleblower Provision154
  • : Considerations for All Affected Employers155
  • : References155
Chapter 15: Investment Bank Research Analysts
  • : Overview157
  • : NASD and NYSE Rules158
    • : Research Department Separation158
    • : Prohibition on Research Soliciting Investment Banking Business158
    • : Analyst Compensation159
    • : Blackout on Research and Public Appearances in Connection with Offerings159
    • : Research Blackout When “Lock-Ups” Expire159
    • : Termination of Coverage159
    • : Analyst Trading Restrictions159
    • : Disclosure Requirement160
    • : Analyst Exams160
    • : Supervisory Procedures160
  • : SEC’s Analyst Certification Rules160
  • : Global Research Analyst Settlement161
  • : References162
Chapter 16: Record Keeping
  • : Document Preservation—Obstruction of Justice163
  • : Retention of Audit Work Papers164
  • : References164
Chapter 17: Remedies and Penalties
  • : Officer and Director Bars165
  • : Civil Liability166
    • : Extended Statute of Limitations for Securities Fraud166
    • : Nondischargeable Debts for Securities Fraud166
    • : Establishment of Disgorgement Fund166
  • : Criminal Penalties166
  • : References167
  Index
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