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Business Ethics Chapter 4

Terms in this set (44)

1.Requires the establishment of a Public Company Accounting Oversight Board In charge of regulations administered by the SEC.
2.Requires CEOs and CFOs to certify that their companies' financial statements are true and without misleading statements.
3.Requires that corporate board of directors' audit committees consist of independent members who have no material Interests in the company.
4.Prohibits corporations from making or offering loans to officers and board members.
5.Requires codes of ethics for senior financial officers; code must be registered with the SEC.
6.Prohibits accounting firms from providing both auditing and consulting services to the same client without the approval of the client firm's audit committee.
7. Requires company attorneys to report wrongdoing to top managers and, if necessary, to the board of directors; if managers and directors fail to respond to reports of wrongdoing, the attorney should stop representing the company.
8.Mandates "whistle-blower protection" for persons who disclose wrongdoing to authorities.
9.Requires financial securities analysts to certify that their recommendations are based on objective reports.
10.Requires mutual fund managers to disclose how they vote shareholder proxies, giving investors Information about how their shares influence decisions.
11.Establishes a ten-year penalty for mail/wire fraud.
12. Prohibits the two senior auditors from working on a corporation's account for more than five years; other auditors are prohibited from working on an account for more than seven years. In other words, accounting firms must rotate Individual auditors from one account to another from time to time.