The Sarbanes Oxley Act puts the CFO and the CEO at the centre of compliance framework. The responsibility of CFO's and CEO's has increased multifold and they are now accountable for good internal controls in their organziations. Below, I am jotting some of the key issues affecting CEO's and CFO's under the Sarbanes OXley act.

1. Establishment of Disclosure Controls and procedures - SOX makes the CEO and CFO responsible for establishing disclosure controls. Disclosure controls ensure that all material information is available to CEO and CFO on a timely basis.

2. Certification of Completeness and Quality of Disclosure Controls - Under Sarbanes Oxley, CEO's and CFO's must individually certify, that the internal control system provides them with all material information and that they have evaluated the internal control system and found it sufficient.

3. Filing Internal Control Report Publicly - Sarbanes Oxley act reuires that an internal control report must accompany Company's 10-K SEC filing, containing an assessment of company's internal control. This assessment has to be reported on by the organziation's statutory auditors.

4. Increased Penalities - The Sarbanes Oxley act provides for severe criminal penalties for CEO's and CFO's for violating provisions of the securities act.

5. Real Time Disclosures - Any changes to a company's financial condition, operations including qualitative information has to be disclosed on a real time basis under SOX.

6. Increased Responsibilities of Audit Committee - Sarbanes Oxley act makes the audit committee responsible for appointing, deciding compensation, and overseeing the work of the internal auditor. The external auditor now is required to report directly to the audit committee.

More on Sarbanes Oxley >>

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