Sarbanes Oxley Section 302 Impact and Requirements

Sarbanes Oxley Section 302 Summary

Sarbanes Oxley Section 302 refers to corporate responsibility for financial reports submitted by a company. SOX Section 302 requires CEO and CFO sign off on the company's quarterly financial reports. The key officers must assert that the company's financial report is accurate, that all material changes have been reported in a timely manner, and that the company has the appropriate Section 404 internal controls to protect against any fraud or inaccuracy in its reporting.

Sarbanes Oxley Section 302 Requirements

The principal executive officer and the principal financial officer of each company filing periodic reports must certify in each annual or quarterly report filed with the SEC that, among other things: 

• The signing officer has reviewed the report
• Based on the officer's knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, not misleading
• Based on such officer's knowledge, the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in the report

Section 302 signing officers

• Are responsible for establishing and maintaining “disclosure controls and procedures”
• Have designed such disclosure controls and procedures to ensure that material information relating to the issuer and its consolidated subsidiaries is made known to them

• Have evaluated the effectiveness of the issuer's disclosure controls and procedures as of a date within 90 days prior to the report
• Have presented in the report their conclusions about the effectiveness of their disclosure controls and procedures based on their evaluation as of that date

Section 302 signing officers have disclosed to the issuer's auditors and the audit committee

• All significant deficiencies in the design or operation of Section 404 internal controls that could adversely affect the issuer's ability to record, process, summarize, and report financial data and have identified for the issuer's auditors any material weaknesses in internal controls
• Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's Section 404 internal controls
• The signing officers have indicated in the report whether or not there were significant changes in Section 404 internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Sarbanes Oxley Section 302 Impact

Sarbanes Oxley Section 302 places a significant responsibility on corporate officers who must certify that they have appropriate internal controls to ensure financial data being reported is accurate true.  Because of this Sarbanes Oxley Compliance has become a multi-billion dollar business.  Sarbanes Oxley consultants, Sarbanes Oxley Auditors and Sarbanes Oxley related software companies can expect to reap the growth in Sarbanes Oxley related markets for many years to come.

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