• According to the Sarbanes-Oxley Act, publicly held corporations are required to make disclosures regarding their financial status.Corporate building image by Christopher Dodge from Fotolia.com
  
  The Sarbanes-Oxley Act is a piece of legislation that was enacted in 2002 by United States Senator Paul Sarbanes and Representative Michael Oxley in response to a rash of corporate accounting scandals that were exposed in the early years of the 21st century. Under the rule mandated by the Sarbanes-Oxley Act, publicly held corporations must adhere to certain standards in the interests of full disclosure to stockholders and interested parties. The act is divided into 11 titles. The most important sections, when it comes to complying with the law, are 302, 401, 404, 409 and 802.
  
  

Section 302

• Section 302 of the Sarbanes-Oxley Act mandates that corporations' periodic filing include certifications that: (1) the signing officers have reviewed the report; (2) the report does not contain any untrue statements or omissions and is not misleading; (3) the financial statements and related information fairly present the financial condition and the results in all material aspects; and that (4) the signing officers are responsible for internal controls and have evaluated those controls within the preceding 90 days and made a report on their findings.
  
  Also according to Section 302, financial reports must include a list of all deficiencies in the internal controls of the company and any existing employee fraud, and any significant changes in internal controls or related factors that could have a negative impact on internal controls.
  
  Section 302 is located in Title III of the Sarbanes-Oxley Act: "Corporate Responsibliity of Financial Reports."
  
  

Section 401

• Section 401 simply requires that financial statements be accurate and do not state incorrect information. Further, this section requires that financial statements include all material transactions, liabilities and obligations, even if they are not included on the corporation's balance sheet.
  
  Section 401 is located under Title IV of the Sarbanes-Oxley Act: "Disclosures in Periodic Reports."
  
  

Section 404

• This part of Sarbanes-Oxley requires corporations to include, in their annual reports, information disclosing and detailing their internal procedures for maintaining an adequate reporting system. A corporation's accounting firm should join the report by attesting to the adequacy of the corporation's internal controls and procedures.
  
  Section 404 is located under Title IV of the Sarbanes-Oxley Act: "Management Assessment of Internal Controls."
  
  

Section 409

• Section 409 requires corporations to disclose information to the public regarding material changes in their financial condition or operations to the public in a timely and "urgent" manner. These disclosures of information should be formatted in laymen's terms.
  
  Section 409 is located under Title IV of the Sarbanes-Oxley Act: "Enhanced Financial Disclosures."
  
  

Section 802

• Section 802 describes the punishment for illegal acts related to financial documents. Altering, mutilating or destroying corporate documents with the intent to influence or impede a legal investigation may lead to a prison term of up to 20 years. Accountants who knowingly violate the rules mandated by Sarbanes-Oxley are also vulnerable to receiving up to 10 years in prison.
  
  Section 802 may be found under Title VIII of the Sarbanes-Oxley Act: "Criminal Penalties for Altering Documents."