New provisions to toughen up Sarbanes-Oxley
The US Securities & Exchange Commission has today voted to propose rules implementing provisions of the controversial Sarbanes-Oxley Act, aimed at improving transparency and accountability.
Link: Sarbanes-Oxley special report
The new rules would, if passed, require public companies to disclose information about internal control reports, company codes of ethics and audit committee financial experts.
The proposals also include rules which would prohibit actions designed to improperly influence auditors.
The proposals include:
- The company would be required to disclose the number and names of the ‘financial experts’ serving on the company’s audit committee and that they are independent of management, as determined by the company’s board of directors.
- A company would be required to disclose whether the company has adopted a code of ethics for the company’s principal executive officer and senior financial officers, or if it has not, why it has not; and to disclose on a current basis amendments to, and waivers from, the code of ethics relating to any of those officers.
- A company would be required to file, in its annual report, an internal control report of management stating its responsibilities for establishing and maintaining adequate internal controls and procedures for financial reporting for the company,
Companies have the 30 days in which to lodge comments with regards to the new proposals, after they have been published on the Federal Register.