Compliance Requirements
Public Company Audit
Committees
All organisations governed by SEC regulations are required to establish
and maintain an audit committee that shall be responsible for the
appointment, compensation and oversight of any registered public
accounting firm employed by that issuer. The accounting firm shall
report directly to the audit committee. All audit committee members
shall be members of the organisation's board of directors but shall
be otherwise independent. They may therefore not be an affiliated
person of the organisation or an associated company, nor may they
accept consulting, advisory or other compensatory fees other than
in their capacity as audit committee members.
The audit committee shall
establish procedures regarding the handling of complaints relating
to accounting, controls, or auditing matters. They must also develop
procedures for the confidential, anonymous submissions by the organisation's
employees concerning questionable accounting or auditing practices.
The audit committee shall
be able to appoint advisors as considered necessary and to receive
adequate funding for the organisation for such purposes.
Corporate Responsibility
for Financial Reports
Periodic statutory financial reports are to include certifications
that:
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The signing officers have
reviewed the report. |
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The report does not contain any material
untrue statements or material omission or be considered misleading.
|
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The financial statements and related
information fairly present the financial condition and the
results in all material respects. |
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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. |
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A list of all deficiencies in the internal
controls and information on any fraud that involves employees
who are involved with internal activities. |
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Any significant
changes in internal controls or related factors that could
have a negative impact on the internal controls.
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Organisations may not attempt
to avoid these requirements by reincorporating their activities
or transferring their activities outside of the United States
Improper Influence
on Conduct of Audits
No officer or director of an issuer may take any action to fraudulently
influence, coerce, manipulate or mislead any accountant engaged
in an audit of financial statements in order to mislead.
Forfeiture of Certain
Bonuses and Profits
If, due to non-compliance with the Act, the issuer is required to
restate the accounts, the CEO and the CFO shall reimburse the issuer
with any bonus, incentive or equity based compensation received
by them during a twelve month period plus repay any profits realized
from the sale of securities of the issuer in that period.
Officer and Director
Bars and Penalties
This section makes changes to the Securities Act 1933 and the Securities
Exchange Act 1934 by removing the words "substantial"
when relating to the term "unfitness".
Insider Trades During
Pension Fund Blackout Periods
Except where specifically permitted, it is unlawful for a director
or official of an Issuer of any security to purchase, sell or transfer
during any blackout period if that person obtains such security
in connection with their service or employment as a director or
official.
Rules of Professional
Responsibilities for Attorneys
The commission is required to issue regulations on minimum standards
for attorneys appearing and practicing before the commission when
representing issuers.
Fair Funds for Investors
Where the commission obtains a disgorgement order in respect of
a violation of the law, it shall place such funds into a disgorgement
fund for the benefit of the victims. The commission may also accept
gifts, bequests and proceeds specifically donated to the disgorgement
fund.
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