Describe the main requirements of the Sarbanes-Oxley Act of 2002

What will be an ideal response?

1. Strict limits on the amount of non-audit fees (consulting or otherwise) that an accounting firm can earn from the same firm that it audits.
2. That audit partners rotate every five years to limit the likelihood that auditing relationships become too cozy over long periods of time.
3. Both the CEO and the CFO must personally attest to the accuracy of the financial statements presented to shareholders and sign a statement to that effect.
4. That senior management and the boards of public companies be comfortable enough with the process through which funds are allocated and controlled, and outcomes monitored throughout the firm, and to be willing to attest to their effectiveness and validity.
5. SOX also stiffened the criminal penalties for providing false information to shareholders.
6. SOX called on the SEC to force companies to have audit committees that are dominated by outside directors and required that at least one outside director have a financial background.
7. CEOs and CFOs must return bonuses or profits from the sale of stock or the exercise of options during any period covered by statements that are later restated.