Your Guide To The Sarbanes Oxley Act

pIf you are a company with connections to the US, you might be required to know about the Sarbanes Oxley act. If youre an American company and havent heard of it previously, you have already learned something about the act. Its a United States act.!–more–/ppSarbanes Oxley is an act that was signed into the US law in 2002. The act was designed to try and stop companies doing what Enron and Worldcom did. Both of these companies were found to have been working using fraud deals for a number of years. In that year, it wasnt required for any companies to present their finance records./ppWhat the act does is it ensures that how businesses are run is legitimate and if they are not, it holds the key players responsible for the problems./ppThe act means that CEOs and CFOs are required to sign the books for the company. They have to sign the books to gaurentee they are not misrepresented and they match the earnings of the company./ppIf it turns out the records are incorrect, there are a number of punishments available for the Chief Officers that signed the records./ppLike I said at the beginning, you may not have to abide by the act. You only need to abide by the act if your company is based in either the US, UK or Europe and they have listings on the US stock exchange. You would also have to abide by the act if the company is based in the UK or Europe by its a subsidiary of an US company./ppThe Sarbanes Oxley act can be annoying for some US companies. Because companies are required to release all their transactions, even the sale and purchase of new assets. This is where people have the problem because all the companys a href=http://www.realassetmgt.com target=_blankfixed assets/a must before recorded./ppThe process of a href=http://www.realassetmgt.com/asset_accounting.htm target=_blankfixed asset accounting/a can be expensive and take time. If you attempt to do the job yourself, based on the size of your company, it can take a number of months and just cause more problems. The best way to make sure you have listed all your assets is by hiring an external company to do the job for you./pp/pp/pp/ppUnfortunately, its definately not a cheap act to abide by. However, a number of asset management companies offer features to make the next time you do an asset audit alot easier and cheaper. Many of the companies also offer a href=http://www.realassetmgt.com/asset_accounting/sox.htm target=_blankSarbanes Oxley compliance software/awhich will make the job even easier for you./ppHopefully that helped you understand what the Sarbanes Oxley act is and what you have to do to abide by it. You most likely wont like the act, but you can blame it on Enron and Worldcom./p