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5 July 2007 SEC proposes consolidation of Regulation S-B rules into Reg. S-K

27 June 2007 SEC proposes reducing holding periods under Rule 144

15 Dec. 2006 SEC again extends Section 404 compliance date for non-accelerated filers

Archives: 2005



The Sarbanes-Oxley Act of 2002, the most significant securities legislation in seven decades, has wrought massive changes in financial reporting, auditing, corporate governance and regulatory oversight.  Following an unprecedented series of accounting scandals, the Act has radically changed the way public companies, and their auditors and advisors, do business.


The Act created the Public Company Accounting Oversight Board to regulate accountants and accounting firms that audit public companies. The Act set new independence standards for auditors and greatly reduced the services that they could provide, while generally requiring that such services be pre-approved by the issuerís audit committee.  Also, while any accounting or consulting firm may provide non-audit services, only an accounting firm registered with the PCAOB may audit or review the financial statements of issuers reporting to the SEC.

Corporate Responsibilities

The Act establishes strict accountability standards for corporate boards and audit committees, markedly increasing the duties of the latter.  The Act establishes new accountability standards and criminal penalties for corporate management.  These new standards are designed to promote greater accountability by issuers and auditors; protect small investors and pension holders; and expose and severely punish acts of corporate corruption and fraud.  By example, Section 3 of the Act specifies that a violation of  PCAOB rules is treated as a violation of the Exchange Act, giving rise to the very same penalties.

Internal Control Reporting

Among other provisions addressing financial reporting and disclosure, conflicts of interest, and corporate governance at public companies, Section 404 requires public companies to include managementís assessment of the effectiveness of their systems of internal control together with an audit report thereon by the companiesí auditors.  The first such annual reports complying with these new requirements have been filed for those public companies classified as ďAccelerated Filers.Ē  The effective date for Section 404 requirements for other registrants and small business issuers, recently re-amended, is now fiscal years ending after December 15, 2007 for managementís assessment and fiscal years ending after December 15, 2008 for the related auditorís report.  If a companyís initial registration statement becomes effective in 2007, it becomes subject to both requirements in the year following the year in which it was first required to file or did file an annual report.

THE SARBANES-OXLEY ACT OF 2002 Definitions                              Commission Rules & Enforcement 

PUBLIC COMPANY ACCOUNTING _OVERSIGHT BOARD          Establishment; Administration    Registration with the Board Auditing, Quality Control & Independence: _Standards & Rules                   Inspections of Registered Firms Investigations & Disciplinary Proceedings Foreign Public Accounting Firms Commission Oversight                       Accounting Standards                    Funding


AUDITOR INDEPENDENCE         Services Outside the Scope of Practice Pre-Approval Requirements               Audit Partner Rotation                   Auditor Reports to Audit Committees Conforming Amendments             Conflicts of Interest                         Study of Mandatory Firm Rotation _ Commission Authority        Considerations by State Authorities

CORPORATE RESPONSIBILITY    Public Company Audit Committees      Responsibility for Financial Reports Improper Influence on Auditors         Forfeit of Certain Bonuses & Profits Officer & Director Bars & Penalties Insider Trades In Blackout Periods   Rules of Responsibility for Attorneys    Fair Funds for Investors  

ENHANCED FINANCIAL DISCLOSURE Disclosures in Periodic Reports  Enhanced Conflict of Interest Provisions Disclosures of Transactions Involving _Management & Principal Stockholders Management Internal Control _Assessment (Section 404)      Investment Company Exemption       Code of Ethics for Financial Officers  Audit Comm. Financial Expert Disclosure Enhanced Periodic Disclosures Review Real Time Issuer Disclosures

ANALYST CONFLICTS OF INTEREST Treatment of Securities Analysts by _Securities Associations & Exchanges

SEC RESOURCES & AUTHORITY Authorization of Appropriations Appearance & Practice Before the SEC   Authority to Impose Penny Stock Bars Qualifications re: Brokers & Dealers  

STUDIES & REPORTS                     GAO Study & Report Regarding _Consolidation of Public Audit Firms Commission Study & Report Regarding _Credit Rating Agencies                  Study & Report on Violators & Violations Study of Enforcement Actions          Study of Investment Banks

CORPORATE & CRIMINAL FRAUD Criminal Penalties for Altering Documents Debts Non-Dischargeable if Incurred _in Violation of Securities Fraud Laws   Statute of Limitations for Securities Fraud Review of Federal Sentencing Guidelines _for Obstruction of Justice/Criminal Fraud Protection re:Public Company Employees _Who Provide Evidence of Fraud              Criminal Penalties for Defrauding Share-_holders of Publicly Traded Companies

WHITE-COLLAR CRIME PENALTY  ENHANCEMENTS                      Attempts/Conspiracies to Commit Fraud Criminal Penalties for Mail & Wire Fraud  Criminal Penalties for ERISA Violations  Amendments to Sentencing Guidelines  Responsibility for Financial Reports

CORPORATE TAX RETURNS        Sense of the Senate Regarding the _Signing of Corporate Returns by CEOs

ISSUER FRAUD & ACCOUNTABILITY Tampering with a Record or Otherwise _Impeding an Official Proceeding Temporary Freeze Authority for the SEC  Amendment to Sentencing Guidelines SEC Authority  to Prohibit Persons from _Serving as Officers or Directors           Increased Criminal Penalties under _the Securities Exchange Act of 1934 Retaliation Against Informants