Sarbanes-Oxley DD Checkpoints
Chapters in this video
- 0:00 SOX enhanced financial disclosures and Blake's DD agenda
- 1:00 Personal-loan prohibition: the flat ban on issuer-to-insider lending
- 2:25 Accelerated Form 4 and the 2-business-day insider-reporting rule
- 3:46 Internal control over financial reporting: the two-signature requirement
- 5:09 The DD document hunt: where Blake finds each checkpoint
- 5:51 Rapid-fire exam recap
What this video covers
- Why an issuer extending personal loans to directors and executive officers is banned, and why "on market terms" or "fair rate" will never save the loan
- The SOX-accelerated Form 4 deadline of 2 business days from the transaction date, and how to avoid the old pre-SOX "10th day of the following month" distracter
- Why the Form 4 clock starts on the transaction date, not settlement date, and why weekends and federal holidays do not count as business days
- The two-part internal control over financial reporting (ICFR) requirement: management's assessment plus the independent auditor's attestation
- Why a Form 10-K with only management's assessment and no auditor attestation is incomplete for SOX compliance
- Where to hunt for each checkpoint during due diligence: related-party footnotes and board minutes for loans, EDGAR for Form 4 activity, and the controls and procedures section of the 10-K for ICFR
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 79 course also includes adaptive practice questions and spaced-repetition flashcards.