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The Sarbanes-Oxley Act of 2002 applies to companies that are publicly traded and to private subsidiaries of publicly traded companies. Passed in response to financial scandals, the act contains a number of provisions, including the following:
For human resources (HR), the Sarbanes-Oxley Act suggests the need to educate directors, officers, employees, and auditors about obligations of that act. Procedures should be established for handling internal Sarbanes-Oxley complaints and for document retention. Compensation practices for executives should be reviewed. In particular, stock options as a form of executive compensation are being viewed with a more critical eye because of the temptation of insiders to artificially inflate the stock price.
Employers may want to include ethics training and establish a corporate code of conduct that requires employees to report questionable accounting practices. Companies should be sure employees are protected from retaliation for reporting wrongdoing.
The Sarbanes-Oxley Act of 2002 applies to companies that are publicly traded and to private subsidiaries of publicly traded companies. Passed in response to financial scandals, the act contains a number of provisions, including the following:
For human resources (HR), the Sarbanes-Oxley Act suggests the need to educate directors, officers, employees, and auditors about obligations of that act. Procedures should be established for handling internal Sarbanes-Oxley complaints and for document retention. Compensation practices for executives should be reviewed. In particular, stock options as a form of executive compensation are being viewed with a more critical eye because of the temptation of insiders to artificially inflate the stock price.
Employers may want to include ethics training and establish a corporate code of conduct that requires employees to report questionable accounting practices. Companies should be sure employees are protected from retaliation for reporting wrongdoing.