Sarbox all-in-one for Dummies

This site is still under contruction.  There are some links that do not include all of the information yet and will be updated in the near future. Thank you for you patience.

The 2008 Master Global E-Business program includes a course in Competitive Intelligence (CI).  The professor is Mr. Jean-Paul Pinte. The objectives of this course are to learn “What is competitive intelligence” is all about and implement the processes necessary that will demonstrate our newly learned skills.  The course started with an introduction that included a Pdf on “Competitive Inteligence Intro” that discussed the various implementations and value of CI and strategic management.  The course continued with some examples of practical usages of CI in various corporate setting.  Finally, the class was introduced to a PowerPoint Presentation that discussed the CI 2006. The course climaxed as the discussion turned towards the types of tools used for various types of keyword searches using the internet as an information source for Competitive Intelligence. Our individual class assignment was to implement what we learned about the techniques of CI, on a subject of our choosing.  I chose “The Sarbanes-Oxley Act of 2002” as my subject because I have a MBA in Accounting, and I know that this particular piece of American legislation has redefine the way U.S. public companies do business.  The complexity of the subject matter is that it is novel and many people, whether they and the accounting field or not have many question about the topic.  My aim was gather as much information together in one place as possible from various sources, so that the end user (me) will have a competitive advantage on the topic. I used a variety of online search tools such as the classic ones: Yahoo, and Google; but I also used other tools such as Meta-engines, and Clustering such as Dogpile , Northern Light Search, and a desktop download Copernic.  I found the Mapping tools such as KartOO to be particularly useful because of the way it grouped and categorize my search results, which in turn assisted me in narrowing the scope of my topic.  With the aid of my professor and this assignment, I was able to make practical use of the different tools that were taught to the class on how to obtain and select the most pertinent information through various channels such as internet, press, blogs, and various other online-medias to obtain valid update information.  Yet a secondary benefit for me, was being able to enhance my knowledge of the “The Sarbanes-Oxley Act of 2002” by way of using the Competitive Intelligence techniques.

Searching methods and tools

After chosing my subject the next step was to consider my search methods and tools. My studies taught me that by using a varirty of methods and tools I could yield better result in obtaining both quality and the quantity for my subject matter.

The key words

1. SarBoX
2. SOX
3.  Sarbanes-Oxley
4. Sarbanes-Oxley Act of 2002
5. Sarbanese
6. Oxley

The tools

1. Searching engines
    Google http://www.google.com
    MSN http://www.msn.com
    Yahoo http://www.yahoo.com
    Dogpile http://www.dogpile.com 

2. Cartography
    KartOO http://kartoo.com 

3. Invisible web
    Adobe PDF Search
    http://searchpdf.adobe.com

4. On-line encyclopedia
    
    Wikipedia, collective encyclopidia
     http://www.wikipedia.org 

     Encyclopedia Britannica
     http://www.britannica.com 

5. Collogues and conferences
    
     Allconferences
    http://www.allconferences.com/

6. RSS Really Simple Syndication

7. Youtube
    
    Videos
    http://www.youtube.com

   8. Dailymotion

      http://www.dailymotion.com

The Sarbanes-Oxley Act of 2002 (H.R. 3763) also referred to as SOX. SarBox. SOA, is legislation that was created to changed the way public companies under United States jurisdiction account for the way they must do business. All public companies need to understand what this act means, and what they must do to ensure compliance. A public company (also called publicly held or publicly traded) is a company which has issued securities through an offering, and those securities are now traded on the open market. A public company is just the opposite of private company, who are not regulated by Sarbanes-Oxley.

Why did we need SOX?

There had been a long standing trend in the Public Company’s accounting practices that evaded the truth about their actual worth and or their ability to be an on-going-concern.  Some called this accounting practice “colorful accounting;” meaning that the truth, when it would hurt the image of the business was shaded over in order for the company to look better on paper. This practice continued to grow until it was blatantly abused by a company called Enron under the nose of their auditing accounting firm Arthur Andersen. Enron filed for bankruptcy once the truth was established about their actual worth. The collapse of energy giant Enron was one of the largest bankruptcies and cast a major spot light on one of the most shocking corporate failures in United States history. It took Enron a little more than 15 years to grow into one of the United State’s largest public companies. Enron business was centered on creating new methods of trading in energy, and was known for highlighting and establishing new technological advances. In their time, Enron was considered to be a great example of what a successful corporation in a United States could aspire to be. The company’s success was based fraudulent based on their unrealistically exaggerated profits and colorful accounting practices. The importance of this case was that its economic impact did not just affect the company and its’ employees, but had a ripple effect that extended to very large investors (pension etc.) and the U.S. economy. In addition there were other companies and their auditing accounting firm that were under investigation for basically the same thing. That is why the U.S. government got involved and drafted new legislation.

According to the August 2002 issue of Real Corporate Lawyer details issues that led up to drafting of the new legislation are as follows:

•    Administration: President Bush Outlines More Actions to Bolster Confidence
•    Congress: Senate Unanimously Passes Accounting Reform Bill
•    SEC I: 1st Regulation FD Enforcement Action Reported to be Settled
•    SEC II: PwC Pays $5 million to Settle Independence Violation Allegations
•    SEC III: Synopsis of Comment Letters on 8-K Insider Reporting Proposal
•    SEC IV: Staff Allows Inclusion of Proposals on Shareholder Approval of Option Plans
•    SEC V: Fannie Mae and Freddie Mac Volunteer for '34 Act Reporting
•    SEC VI: 1st Enforcement Action for Misuse of Special Purpose Entities
•    CEO and CFO Certifications: Eleven Practical Considerations
•    Insider Transaction Reporting: Practice Tips for Expedited Reporting
•    Stock Options: Controversy Continues as More Companies Expense
•    What's Up Online: 10 Common Mistakes on IR Web Pages
•    Comings and Goings: Who's Doing What and Where

This this section I have added links to past, current, and up-coming events relative to Sarbanes-Oxley.

It is very important to be able to retain up-to-date changes.

Training is an very part implementing new regulations.

Visualization are important training and education tools.  This site can provide us with up-to-date opinons from the experts.

SOX 5th Anniversary - Senator Paul Sarbanes
Senator Paul Sarbanes speaks at the 5th Anniversary event commemorating the passage of the Sarbanes-Oxley Act in 2002. He reviews the the changes that have occured since Senator Paul Sarbanes speaks at the 5th Anniversary event commemorating the passage of the Sarbanes-Oxley Act in 2002. He reviews the the changes that have occured since, and talks about many of the benefits resulting from the provisions of the law. He also discusses the principles of Section 404 and need to modify implementation.

Congressman Michael Oxley at Fordham University

Congressman Michael Oxley at Fordham University speaking on Sarbanes Oxley Act - 9/2006.

TaipanFinancialNews: Sarbanes-Oxley Act
Financial news investing Sarbanes-Oxley Act http://www.taipanfinancialnews.com -- Not one but FOUR "inconvenient truths" about Nature, the Markets, the late Anna Nicole Smith... and the negative effects of government red tape on the US financial markets... from TaipanFinancialNews.Com's prez J. Christoph Amberger!

World Energy Television controversial issues on Sarbanes-Oxley Act of 2002 Videos
Concluding its series on Technology and Leadership, World EnergyTelevision examines the demands compliance puts on the industry. The show notes that the auditing and reporting of reserves and production, if not accurate and timely, can lead to big trouble. Panels of industry experts, including CEOs themselves, are brought in to share their views on the impact compliance issues have on the energy industry. In the aftermath of Enron, the Sarbanes-Oxley Act of 2002 was "slapped together" to respond to a tragedy and, according to Matt Simmons of Simmons & Company International, "was the worst piece of legislation that we've probably ever had." Roger Smith hosts as Matt Simmons, John Gibson of Paradigm, David Johnson of Protiviti, and Lane Sloan of the Greater Houston Energy Collaborative, describe the problems of compliance and examine potential solutions including information technology, reserve auditing, high-integrity management and transparency.

Rapid Compliance: Meeting the Demands Pt 1

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Rapid Compliance: Meeting the Demands Pt 2

Rapid Compliance: Meeting the Demands Pt 3

Overview
Sarbanes-Oxley contains 11 titles that describe specific mandates and requirements for financial reporting. Each title consists of several sections, summarized below.
TITLE I -- "Public Company Accounting Oversight Board (PCAOB)"
Title I establishes the Public Company Accounting Oversight Board, to provide independent oversight of public accounting firms providing audit services ("auditors"). It also creates a central oversight board tasked with registering auditors, defining the specific processes and procedures for compliance audits, inspecting and policing conduct and quality control, and enforcing compliance with the specific mandates of SOX. Title I consists of nine sections.
TITLE II -- "Auditor Independence"
Title II consists of nine sections, establishes standards for external auditor independence, to limit conflicts of interest. It also addresses new auditor approval requirements, audit partner rotation policy, conflict of interest issues and auditor reporting requirements. Section 201 of this title restricts auditing companies from doing other kinds of business apart from auditing with the same clients.
TITLE III -- "Corporate Responsibility"
Title III mandates that the senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 implies that the company board (Chief Executive Officer, Chief Financial Officer) should certify and approve the integrity of their company financial reports quarterly. This helps establish accountability. Title III consists of eight sections.
TITLE IV -- "Enhanced Financial Disclosures"
Title IV consists of nine sections. It describes enhanced reporting requirements for financial transactions, including off-balance-sheet transactions, pro-forma figures and stock transactions of corporate officers. It requires internal controls for assuring the accuracy of financial reports and disclosures, and mandates both audits and reports on those controls. It also requires timely reporting of material changes in financial condition and specific enhanced reviews by the SEC or its agents of corporate reports. http://en.wikipedia.org/wiki/Off-balance-sheet
TITLE V -- "Analyst Conflicts of Interest"
Title V consists of only one section, which includes measures designed to help restore investor confidence in the reporting of securities analysts. It defines the codes of conduct for securities analysts and requires disclosure of knowable conflicts of interest.
TITLE VI -- "Commission Resources and Authority"
Title VI consists of four sections and defines practices to restore investor confidence in securities analysts. It also defines the SEC’s authority to censure or bar securities professionals from practice and defines conditions under which a person can be barred from practicing as a broker, adviser or dealer.
TITLE VII -- "Studies and Reports"
Title VII consists of five sections. These sections 701 to 705 are concerned with conducting research for enforcing actions against violations by the SEC registrants (companies) and auditors. Studies and reports include the effects of consolidation of public accounting firms, the role of credit rating agencies in the operation of securities markets, securities violations and enforcement actions, and whether investment banks assisted Enron, Global Crossing and others to manipulate earnings and obfuscate true financial conditions.
TITLE VIII -- "Corporate and Criminal Fraud Accountability"
Title VIII consists of seven sections and it also referred to as the “Corporate and Criminal Fraud Act of 2002.” It describes specific criminal penalties for fraud by manipulation, destruction or alteration of financial records or other interference with investigations, while providing certain protections for whistle-blowers.
TITLE IX -- "White Collar Crime Penalty Enhancement"
Title IX consists of two sections. This section is also called the “White Collar Crime Penalty Enhancement Act of 2002.” This section increases the criminal penalties associated with white-collar crimes and conspiracies. It recommends stronger sentencing guidelines and specifically adds failure to certify corporate financial reports as a criminal offense.
TITLE X -- "Corporate Tax Returns"
Title X consists of one section. Section 1001 states that the Chief Executive Officer should sign the company tax return.
TITLE XI -- "Corporate Fraud Accountability"
Title XI consists of seven sections. Section 1101 recommends a name for this title as “Corporate Fraud Accountability Act of 2002” It identifies corporate fraud and records tampering as criminal offenses and joins those offenses to specific penalties. It also revises sentencing guidelines and strengthens their penalties. This enables the SEC to temporarily freeze large or unusual payments.