The Sarbanes-Oxley Act: A Compendium

This compendium provides links to all the materials published by Faegre & Benson in regard to the Sarbanes-Oxley Act.

RESOURCES:

The Sarbanes-Oxley and SEC Scorecard: A grid of SEC regulations implementing SOX, with web links and relevant dates.

NYSE and NASDAQ Scorecard: A grid of final and proposed NYSE and NASDAQ rules related to corporate governance issues, including web links to the text of the rules and relevant dates.

SEC Frequently Asked Questions: The SEC issued these FAQs in November 2002.

To view the full text of any of the articles listed below, please select the article from the list to the left.

Corporate Governance and the Nonprofit Board of Directors
Although not directly applicable to nonprofit organizations, the requirements set by Sarbanes-Oxley may become relevant to the governance of nonprofits as "best practices" or even threshold expectations. Some state legislatures and attorneys general are already advancing Sarbanes-Oxley-type governance standards directed at nonprofits. While a nonprofit director's core duties have not changed, there are specific steps that nonprofit boards may consider to improve the exercise of their oversight responsibilities.

Sarbanes-Oxley and IT: Beware of Magic Bullet Solutions
Buyers of Sarbanes-Oxley technology solutions should take care to remember legal doctrines beyond pure compliance issues – including those of contract, warranty and intellectual property – since those other laws will greatly influence the success of the project. Moreover, buyers should be wary of ‘magic bullet' solutions – those that promise instant and easy compliance. Any wise buyer of Sarbanes-related IT should follow certain basic principles and practices in their purchase and implementation of new or improved systems.

More Changes on SEC Periodic Reports: Certifications, Earnings Releases, and Internal Controls
Many public companies have just released earnings information for the quarter ended June 30, 2003 and are in the process of finalizing the Quarterly Report on Form 10-Q due on August 14, 2003. Recent SEC rules affect the way companies furnish earnings releases with the SEC. The rules also change the procedure for filing CEO/CFO certifications and the disclosure required about the company's disclosure controls and procedures and internal control over financial reporting.

SEC Issues Final Rules On Listed Company Audit Committee Standards
On April 1, 2003, the SEC adopted final rules to satisfy the requirements of Section 301 of the Sarbanes-Oxley Act. Section 301 required the SEC to direct the national securities exchanges and associations (such as the NYSE, AMEX and NASDAQ) to prohibit the listing of securities of a company that does not have an audit committee that meets certain standards.

SEC Issues Interim Guidance for Item 11 and Item 12 of Form 8-K
On March 27, 2003, the SEC issued interim guidance for issuers required to file or furnish information on a Form 8-K pursuant to new Item 11 or Item 12. New Item 11 of Form 8-K requires issuers to file the public notice of a pension plan blackout period. New Item 12 of Form 8-K requires issuers to furnish any public announcement or release disclosing results of operations or financial condition for a completed quarterly or annual fiscal period.

SEC Proposes Amendments and Issues Guidance on Sarbanes-Oxley Certifications
On March 21, 2003, the SEC issued proposed rules that would require companies to file the certifications required by Sections 302 and 906 of Sarbanes-Oxley as exhibits to the periodic reports to which they relate and offers "interim guidance" on how certifications required by Section 906 of Sarbanes-Oxley should "accompany" a periodic report.

SEC Rules Won't Eliminate Pro Forma Disclosures on Potential M & A Deals
After the SEC issued rules governing the use of non-GAAP financial measures, many companies active in the M & A market expressed concern that the rules would limit a company's ability to disclose to investors the impact of the combination on the combined companies. But in fact, "pro forma" is alive and well.

SEC Summarizes Comments From Fortune 500 Review
The SEC recently completed its review of Form 10-K annual reports filed in 2002 by all Fortune 500 companies, and issued comment letters to more than 350 of the Fortune 500 companies. The SEC posted on its website a summary of the most frequent areas of comment where the SEC believes that disclosure could be significantly enhanced.

The Effect of Sarbanes-Oxley on Private Companies
Sarbanes-Oxley has raised the bar for many areas of corporate governance and financial compliance for public companies. Many private companies can expect that some requirements will also, directly or indirectly, extend to them. By complying voluntarily, larger private companies (or those companies with aspirations of significant growth) can reap rewards.

New SEC Rules Restrict Director and Officer Trading During Retirement Plan Blackout Periods
On January 22, 2003, the SEC issued final rules to implement Section 306(a) of the Sarbanes-Oxley Act, which restricts trading by directors and executive officers of a public company in that company's equity securities during a retirement plan blackout period.

SEC Issues Proposed Rules - MD&A Disclosures and Use of Non-GAAP Financial Measures
Section 401(a) of the Sarbanes-Oxley Act of 2002 requires the SEC to adopt rules by January 26, 2003 requiring each annual and quarterly report filed with the SEC to disclose all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the issuer with unconsolidated entities or other persons, that may have a material current or future effect on financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.

Whistleblower Protections and Audit Committee Complaint Procedures Under Sarbanes-Oxley
Employees of publicly-traded companies enjoy new whistleblower protections under Sarbanes-Oxley. The Act also requires audit committees to establish procedures to receive and respond to complaints regarding accounting, internal accounting controls, or auditing matters.

SEC Releases Next Series of Proposed Rules Related to Sarbanes-Oxley
On October 22, 2002, the SEC proposed disclosure rules related to "financial experts" on the audit committee; written codes of ethics; and internal controls reports.

New SEC Requirements Regarding Controls and Procedures
New rules require public companies to disclose certain information about the company's disclosure controls and procedures, as well as the company's internal controls. In addition, new SEC rules requiring CEO and CFO certifications include specific certifications regarding disclosure controls and procedures and internal controls.

SEC Implements Faster Reporting of Certain Employer Stock Transactions In Qualified Retirement Plans
Under Section 16(a) of the Securities Exchange Act of 1934, officers, directors and principal security holders of Company stock are required to file with the SEC reports of changes of beneficial ownership, including changes that occur due to certain transactions involving stock held by qualified retirement plans. The Sarbanes-Oxley Act of 2002 amended Section 16(a) to impose faster filing deadlines for those reports. The SEC has adopted amendments to its rules and forms effective August 29, 2002 to implement the accelerated filing deadlines.

SEC Adopts Final Rules on Deadlines and Certifications
On August 27, 2002, the SEC adopted final rules related to deadlines for reporting insider trades and certifications of corporate reports by CEOs and CFOs. The rules went into effect on August 29. In addition, the SEC approved rules accelerating deadlines for filing 10-K and 10-Q forms.

Accounting Reform Bill Imposes New Restrictions on Executive Compensation
The Sarbanes-Oxley Act contains several provisions that may affect the executive compensation programs of such public companies. Those portions of the Act are summarized below.

CEOs and CFOs Required to Certify SEC Reports
There are now three separate requirements for certifications of periodic reports by CEOs and CFOs of public companies. In addition to the one-time SEC requirement for approximately 1,000 large companies, the Sarbanes-Oxley Act has added two more that apply to all public companies.

Sarbanes-Oxley Accelerates Deadline for Section 16 Reports
Under the new corporate governance law, many insiders will need to report trades in company stock to the SEC by the end of the second business day after the transaction. The SEC doesn't plan to extend the August 29 deadline for the accelerated reporting rules to take effect.

New Law Implements Broad Accounting and Governance Reform
On July 30, President Bush signed the Sarbanes-Oxley Act of 2002, which implements broad accounting and corporate governance reform. The Act is intended to boost investor confidence and restore integrity to the capital markets. This article provides a summary of the law's important new provisions.