by law enforcement, congressional committee, or
employee supervisor. • Bankruptcy cannot be used to avoid liability from securities laws violations. •
Investors are able to file a civil action for fraud up to two years after discovery of the facts and five years
after the occurrence of fraud. • The SEC can receive a restraining order prohibiting payments to insiders during an investigation. •
The SEC can prevent individuals from holding an offi- cer’s or director’s position in a public company as a result of violation of the securities law.
All audit services must be preapproved by the audit committee and must be disclosed to investors. •
The lead audit or reviewing audit partner from the auditing accounting firm must change at least once every five fiscal years. • The registered accounting firms must report to the audit committee all accounting policies and practices used, alternative uses of the financial information within GAAP that has been discussed with manage- ment, and written communications between the accounting firm and management. •
An auditing firm is prohibited from auditing a com- pany if the company’s CEO or CFO was employed by the auditing firm within the past year. A Public Company Accounting Oversight Board is estab- lished by the SEC to oversee the audits of public com- panies. The board will register public accounting firms, establish audit standards, inspect registered accounting firms, and discipline violators of the rules. No person can take part in an audit if not employed by a regis- tered public accounting firm. Strategic Management: Planning for Domestic & Global Competition, 13th Edition the company’s financial condition and result of operations for the period represented. The certification also makes the officers responsible for establishing and maintaining internal controls such that they are aware of any material information relating to the company. The officers must also evaluate the effectiveness of...
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