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Sarbanes-Oxley News & Developments
Dealing With Details Crucial To Life With Sarbanes-OxleyBy now, board members, audit committees, company CEOs and CFOs have spent more time complying with the myriad effects of the Sarbanes-Oxley Act than they ever expected. There is one challenge that firms are now grappling with and that is the whistleblower provisions.
> > The Sarbanes-Oxley Act Section 301(4) of the law requires that firms establish a way for employees to contact audit committees directly and anonymously. Additionally, it requires audit committees to establish procedures for the confidential, anonymous submission by employees of the issuer with concerns regarding questionable accounting or auditing matters.
Section 806 establishes protections for whistleblowers, employees who report incidents of fraud, theft and the like.Specifically, companies or individual officers may not discharge,demote,suspend,threaten,harass or in any matter discriminate against an employee who directly or indirectly provides information resulting in an investigation of possible violations of the SEC or federal laws.
Sections 901 thru 905 amend various parts of the US Code to create penalties, including fines of up to $5 million for individuals and criminal punishments up to 20 years in prison.
Companies must review the pros and cons to design a program internally or hire an outside source to handle employee communications.
There are a number of execellent resources for companies monitoring developments with Sarbanes-Oxley. Lawyers with SEC practices areas are particularly aware of developments. The Financial Executive Institute Web site, www,FEI.org, should certainly be watched. The site www.complianceweek.com is dedicated to Sarbanes-Oxley compliance and also publishes a newsletter. A free e-mail update called The Whistleblower Report is available from The Compliance Partners.
Source: Nashville Business Journal article
Published:2003-05-22
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