Sarbanes-Oxley Act of 2002 (SOX)
SOX drastically modified internal control standards for publicly traded companies operating within United States financial regulatory spheres.
- Section 302: Mandates that corporate officers (specifically the CEO and CFO) directly certify the accuracy of quarterly and annual financial statements, taking personal responsibility for the architecture and testing of disclosure controls.
- Section 404: Requires management to issue an annual internal control report asserting responsibility for establishing and maintaining an adequate internal control structure over financial reporting (ICFR). It also requires an independent registered public accounting firm to attest to, and report on, management’s assessment.
Foreign Corrupt Practices Act (FCPA)
Requires companies registered under US securities law to maintain books, records, and accounts that accurately reflect transactions in reasonable detail. It mandates the creation of a reliable system of internal accounting controls to prevent and detect unauthorized or illicit foreign bribery payments to government figures.Â
Basel III Accords
Global regulatory framework governing banking capital adequacy, market stress-testing metrics, and operational risk metrics. Basel III increases liquidity mandates, demanding that banks establish strict risk mitigation tracking units to ensure financial resilience during global systemic liquidity crunches.
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