Section 402 Sarbanes Oxley

Section 401 listed under title iv enhanced financial disclosures of the sarbanes oxley act deals with financial statements and their requirement to be accurate and presented in a manner that does not contain incorrect statements or admit to state material information.

Section 402 sarbanes oxley. The sec staff for the first time issued interpretive guidance regarding section 402 of the sarbanes oxley act of 2002 sox. In the absence of legislative or regulatory guidance. Section 402 this section prohibits companies from making loans to insiders.

Section 402 of the sarbanes oxley act of 2002 was enacted to prohibit publicly traded companies from providing personal loans to directors and executive officers. 745 enacted july 30 2002 also known as the public company accounting reform and investor protection act in the senate and corporate and auditing accountability responsibility and transparency act in the house and more commonly called sarbanes oxley sarbox or sox is a united states federal law that set new or. As defined in section 2 of the sarbanes oxley act of 2002 directly or indirectly including through any subsidiary to extend or maintain credit to arrange for the extension of credit or to renew an extension of credit in the form of a personal loan to or for any director or.

Disclosures in periodic reports. To date in the absence of authoritative guidance issuers have largely steered clear of activities arguably within the ambit of sox 402 s prohibition on personal loans to officers and directors. 15 usc 7201 note.

Corporate responsibility for financial reports. Since the law was enacted however both requirements have been postponed for smaller public companies. Section 404 of the sarbanes oxley act requires public companies annual reports to include the company s own assessment of internal control over financial reporting and an auditor s attestation.

Disclosures of transactions involving management and principal stock holders. In a broadly worded provision section 402 of the sarbanes oxley act of 2002 the act prohibits u s. The essence of section 302 of the sarbanes oxley act states that the ceo and cfo are directly reponsible for the accuracy documentation and submission of all financial reports as well as the internal control structure to the sec.

Enhanced conflict of interest provisions. Sarbanes oxley act of 2002. Summary of sec actions and sec related provisions pursuant to the sarbanes oxley act of 2002 for immediate release 2003 89a restoring confidence in the accounting profession.