Sarbanes-Oxley Section 404

6777 Words Sep 10th, 2010 28 Pages
Sarbanes Oxley Act, 2002.
Outline
In this paper the Sarbanes Oxley Act with particular reference to the section 404 is discussed in detail. We shall start the paper with providing background information to the Sarbanes Oxley Act, 2002. This section explores the environment that spurred the creation of the act and the need for such legislation. The second section provides an introduction to the Sarbanes Oxley Act section 404 which explores the provisions of Section 404. The next section on ‘Internal Controls Feature of section 404 of the Act’ provides an interpretation and the implication of internal control and the consequences that SOX 404 has on company affairs and the changes it has necessitated is discussed. The accounting profession
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There are requirements of many skilled persons from the accounting, auditing and Information technology to combine in bringing about the compliance of this provision. The current problem with the regulations in this act is that the act on being passed had set mandates for compliance with its requirements and deadlines are set. (Romano, 2005) The provisions of section 404 which has mandated the change therefore will have to be studied in the light of all these requirements.

Section 404 of the Sarbanes Oxley Act: Introduction
There are eleven titles to the Sarbanes Oxley act and the orders for compliance fall under the sections 302, 302, 401, 404, 409, 802 and 906. Of these sections section 404 deals with an important aspect of internal controls in corporate structures. (Romano, 2005) Section 404 is found under title IV. (Sonnelitter, 2005) The provisions of corporate governance (404) SOX was not a point of detailed debate. However there is an accusation that SOX being made mandatory is wrong. (Romano, 2005) The section 404 makes it mandatory for the company to establish and maintain a system that can control the internal activities of the company and financial reporting. This comes as a directive for public companies. (Snedaker, 2006) The federal regulation of financial markets is always the result of market problems. There is a school of thought that maintains that the disclosures under the act could be made optional instead of mandatory. (Romano,

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