Corporate And Criminal Fraud Accountability Section 801 & 802 Of Sarbans Oxley Act, 2002
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The document summarizes key sections of the Sarbanes-Oxley Act of 2002 related to corporate and criminal fraud accountability. Section 801 provides the short title of the act. Section 802 establishes criminal penalties for altering or falsifying documents during federal investigations by adding sections 1519 and 1520 to title 18 of the U.S. code. Section 1519 makes it a crime to alter, destroy or falsify documents to obstruct federal investigations, and Section 1520 requires accountants to retain audit work papers and documents for 5 years.
Corporate And Criminal Fraud Accountability Section 801 & 802 Of Sarbans Oxley Act, 2002
- 1. CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY (SECTION 801 & 802) 1 Vishnu Kesarwani IMS2007011 2nd Semester MS (Cyber Law & Information Security) IIIT-Allahabad
- 2. CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY Chapter 8 of THE SARBANES OXLEY ACT OF 2002 states about the corporate and criminal fraud accountability. This chapter contains 7 sections from section 801 to section 807. There are two key sections in this chapter that are following : Section 801 : Short Title that states : This title may be cited as the Corporate and Criminal Fraud Accountability Act of 2002. 2
- 3. CRIMINAL PENALTIES FOR ALTERING DOCUMENTS(SEC. 802) This section amends Chapter 73 of title 18, United States Code by adding at the end the following: 則 1519. Destruction, alteration, or falsification of records in Federal investigations and bankruptcy 則 1520. Destruction of corporate audit records 3
- 4. DESTRUCTION, ALTERATION, OR FALSIFICATION OF RECORDS IN FEDERAL INVESTIGATIONS AND BANKRUPTCY Section 1519, Chapter 73 of title 18, United States Code states: Whoever knowingly alters, destroys, mutilates, conceals, Covers up, falsifies, or makes a false entry in any record, document, or 4 tangible object
- 5. CONTD with the intent to impede, obstruct, or Influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both. 5
- 6. DESTRUCTION OF CORPORATE AUDIT RECORDS 則 1520. Chapter 73 of title 18, United States Code states : (a)(1) Any accountant who conducts an audit of an issuer shall maintain all audit or review work papers for a period of 5 years from the end of the fiscal period in which the audit or review was concluded. 6
- 7. CONTD (a)(2) The Securities and Exchange Commission shall promulgate, within 180 days after adequate notice and an opportunity for comment relating to the retention of relevant records such as work papers, documents that form the basis of an audit or review memoranda correspondence 7 communications other documents, and records (including electronic records)
- 8. CONTD which are created, sent, or received in connection with an audit or review and shall contain conclusions, opinions, analyses, or financial data relating to such an audit or review, which is conducted by any accountant who conducts an audit of an issuer of securities 8
- 9. CONTD The Commission may amend or supplement the rules and regulations that it is required to promulgate under this section, after adequate notice and an opportunity for comment, in order to ensure that such rules and regulations adequately comport with the purposes of this section. 9
- 10. CONTD 則 1520.(b) states : Whoever knowingly and willfully violates subsection (a)(1), or any rule or regulation promulgated by the Securities and Exchange Commission under subsection (a)(2), shall be fined under this title, imprisoned not more than 10 years, or both. 10
- 11. CONTD 則 1520.(c) states : Nothing in this section shall be deemed to diminish or relieve any person of any other duty or obligation imposed by Federal or State law or regulation to maintain, or refrain from destroying, any document. 11
- 12. CLERICAL AMENDMENT (SECTION 802 (B) ) The table of sections at the beginning of chapter 73 of title 18, United States Code, is amended by adding at the end the following new items: 1519. Destruction, alteration, or falsification of records in Federal investigations and bankruptcy. 1520. Destruction of corporate audit records. 12
- 13. CONCLUSION Companies must ensure their records are authentic, consistent, and incontrovertible. They must have policies in place and that are enforced to ensure appropriate record retention and security. 13
- 14. REFERENCES THE SARBANES OXLEY ACT, 2002 Brown, Kaarst, IT Governance and Sarbanes-Oxley: The Latest Sales Pitch or Real Challenges for the IT Function? Available from ieeexplore.ieee.org/iel5/9518/30166/01385722.pdf?arnumber =1385722 14
- 15. THANKS 15