CORPORATE AND CRIMINAL
     FRAUD ACCOUNTABILITY
        (SECTION 801 & 802)




1                            Vishnu Kesar...
CORPORATE AND CRIMINAL
FRAUD ACCOUNTABILITY

   Chapter 8 of THE SARBANES OXLEY ACT OF 2002 states
    about the corporat...
CRIMINAL PENALTIES FOR
ALTERING DOCUMENTS(SEC. 802)


This section amends Chapter 73 of title 18, United
 States Code by a...
DESTRUCTION, ALTERATION, OR FALSIFICATION
OF RECORDS IN FEDERAL INVESTIGATIONS AND
BANKRUPTCY

Section 1519, Chapter 73 of...
CONTD…

with the intent to

 impede,
 obstruct, or
 Influence
the investigation or proper administration of any matter
...
DESTRUCTION OF CORPORATE AUDIT
RECORDS

§ 1520. Chapter 73 of title 18, United States Code
  states :

(a)(1) Any accounta...
CONTD…
(a)(2) The Securities and Exchange Commission shall promulgate,

   within 180 days
   after adequate notice and
...
CONTD…
which are
 created,
 sent, or
 received
in connection with an audit or review and
shall contain
 conclusions,
...
CONTD…
The Commission may

   amend or
   supplement

the rules and regulations that it is required to promulgate
  unde...
CONTD…
§ 1520.(b) states :

Whoever knowingly and willfully violates

   subsection (a)(1), or

   any rule or regulatio...
CONTD…
§ 1520.(c) states :

Nothing in this section shall be deemed to diminish
 or relieve any person of any other duty o...
CLERICAL AMENDMENT
(SECTION 802 (B) )

The table of sections at the beginning of chapter 73 of
  title 18, United States C...
CONCLUSION
 Companies must ensure their records are
  authentic, consistent, and incontrovertible.
 They must have polic...
REFERENCES

   THE SARBANES OXLEY ACT, 2002

   Brown, Kaarst, IT Governance and Sarbanes-Oxley: The
    Latest Sales Pi...
THANKS



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Corporate And Criminal Fraud Accountability Section 801 & 802 Of Sarbans Oxley Act, 2002

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Corporate And Criminal Fraud Accountability Section 801 & 802 Of Sarbans Oxley Act, 2002

  1. 1. CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY (SECTION 801 & 802) 1 Vishnu Kesarwani IMS2007011 2nd Semester MS (Cyber Law & Information Security) IIIT-Allahabad
  2. 2. CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY  Chapter 8 of THE SARBANES OXLEY ACT OF 2002 states about the corporate and criminal fraud accountability.  This chapter contains 7 sections from section 801 to section 807.  There are two key sections in this chapter that are following : Section 801 : Short Title that states : “This title may be cited as the ‘‘Corporate and Criminal Fraud Accountability Act of 2002’’. 2
  3. 3. CRIMINAL PENALTIES FOR ALTERING DOCUMENTS(SEC. 802) This section amends Chapter 73 of title 18, United States Code by adding at the end the following:  § 1519. Destruction, alteration, or falsification of records in Federal investigations and bankruptcy  § 1520. Destruction of corporate audit records 3
  4. 4. DESTRUCTION, ALTERATION, OR FALSIFICATION OF RECORDS IN FEDERAL INVESTIGATIONS AND BANKRUPTCY Section 1519, Chapter 73 of title 18, United States Code states: Whoever knowingly  alters,  destroys,  mutilates,  conceals,  Covers up,  falsifies, or  makes a false entry in any  record,  document, or 4  tangible object
  5. 5. CONTD… with the intent to  impede,  obstruct, or  Influence the investigation or proper administration of any matter  within the jurisdiction of any department or agency of the United States or  any case filed under title 11, or  in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both. 5
  6. 6. DESTRUCTION OF CORPORATE AUDIT RECORDS § 1520. Chapter 73 of title 18, United States Code states : (a)(1) Any accountant who conducts an audit of an issuer shall maintain  all audit or review work papers for a period of 5 years from the end of the fiscal period in which the audit or review was concluded. 6
  7. 7. CONTD… (a)(2) The Securities and Exchange Commission shall promulgate,  within 180 days  after adequate notice and  an opportunity for comment relating to the retention of relevant records such as work papers, documents that form the basis of  an audit or review  memoranda  correspondence 7  communications  other documents, and records (including electronic records)
  8. 8. CONTD… which are  created,  sent, or  received in connection with an audit or review and shall contain  conclusions,  opinions,  analyses, or  financial data relating to such an audit or review, which is conducted by any accountant who conducts an audit of an issuer of securities 8
  9. 9. CONTD… The Commission may  amend or  supplement the rules and regulations that it is required to promulgate under this section, after  adequate notice and  an opportunity for comment, in order to ensure that such rules and regulations adequately comport with the purposes of this section. 9
  10. 10. CONTD… § 1520.(b) states : Whoever knowingly and willfully violates  subsection (a)(1), or  any rule or regulation promulgated by the Securities and Exchange Commission under subsection (a)(2), shall be fined under this title, imprisoned not more than 10 years, or both. 10
  11. 11. CONTD… § 1520.(c) states : Nothing in this section shall be deemed to diminish or relieve any person of any other duty or obligation imposed by Federal or State law or regulation to maintain, or refrain from destroying, any document. 11
  12. 12. CLERICAL AMENDMENT (SECTION 802 (B) ) The table of sections at the beginning of chapter 73 of title 18, United States Code, is amended by adding at the end the following new items:  1519. Destruction, alteration, or falsification of records in Federal investigations and bankruptcy.  1520. Destruction of corporate audit records. 12
  13. 13. CONCLUSION  Companies must ensure their records are authentic, consistent, and incontrovertible.  They must have policies in place and that are enforced to ensure appropriate record retention and security. 13
  14. 14. REFERENCES  THE SARBANES OXLEY ACT, 2002  Brown, Kaarst, IT Governance and Sarbanes-Oxley: The Latest Sales Pitch or Real Challenges for the IT Function? Available from ieeexplore.ieee.org/iel5/9518/30166/01385722.pdf?arnumber =1385722 14
  15. 15. THANKS 15

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