An Analysis of Selected Provisions of the Sarbanes-Oxley Act of 2002

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the “Act”). The Act was designed to address major accounting scandals that have disrupted the market and shaken investor confidence. The Act fundamentally changes the regulation of the accounting profession, imposes on public companies and their directors and executive officers significant disclosure and corporate governance requirements, and increases the scope and severity of liability under the federal securities laws for public companies and their executive officers, outside auditors, counsel and others.

All public companies, and their directors, executive officers, outside auditors and counsel, must become familiar now with the Act because it includes provisions that affect corporate conduct immediately and many other provisions that will require public companies to prepare for rule changes beginning as soon as August 29, 2002. The most significant immediate mandate under the Act calls for the CEOs and CFOs of all public companies to submit a certification relating to every periodic report containing financial statements, including Forms 10-Q filed after July 30, 2002.

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