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SARBANES-OXLEY ACT OF 2002

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession. The full text of the Act is available in PDF at the Securities and Exchange Commission.

The Sarbanes-Oxley Act of 2002 allows for the use of electronic records. It does not require a specific technology (ust as it does not regulate what brand of fax machine or type of physical paper is used in the office) but rather regulates the processes under which all documents are used. Electronic Signatures allow businesses to reduce costs while at the same time remaining compliant with various State and Federal Laws.

Information regarding the Securities and Exchange Commission (SEC) regulations on electronic signatures can be found on the SEC compliance page

SEC. 103. AUDITING, QUALITY CONTROL, AND INDEPENDENCE STANDARDS AND RULES.

(a)(2)(A)(i) prepare, and maintain for a period of not less than 7 years, audit work papers, and other information related to any audit report, in sufficient detail to support the conclusions reached in such report;

SEC. 104. INSPECTIONS OF REGISTERED PUBLIC ACCOUNTING FIRMS.

(e) RECORD RETENTION.—The rules of the Board may require the retention by registered public accounting firms for inspection purposes of records whose retention is not otherwise required by section 103 or the rules issued thereunder.

SEC. 306. INSIDER TRADES DURING PENSION FUND BLACKOUT PERIODS.

‘‘(i)(2)(D) Written notice.—The notice required to be provided under this subsection shall be in writing, except that such notice may be in electronic or other form to the extent that such form is reasonably accessible to the recipient.

SEC. 406. CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS.

(b) Changes in codes of ethics.—The Commission shall revise its regulations concerning matters requiring prompt disclosure on Form 8–K (or any successor thereto) to require the immediate disclosure, by means of the filing of such form, dissemination by the Internet or by other electronic means, by any issuer of any change in or waiver of the code of ethics for senior financial officers.

CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY ACT OF 2002

Electronic records hold the same requirements of retention and availablity for auditing as any paper record, document or tangible object. Destruction of electronic records is covered under Title VIII's "Corporate and Criminal Fraud Accountability".

Section 802 § 1520. Destruction of corporate audit records

‘‘(a)(1) Any accountant who conducts an audit of an issuer of securities to which section 10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j–1(a)) applies, shall maintain all audit or review workpapers for a period of 5 years from the end of the fiscal period in which the audit or review was concluded. ‘‘(2) The Securities and Exchange Commission shall promulgate, within 180 days, after adequate notice and an opportunity for comment, such rules and regulations, as are reasonably necessary, relating to the retention of relevant records such as.... records (including electronic records) which are created, sent, or received in connection with an audit or review and contain conclusions, opinions, analyses, or financial data relating to such an audit or review, which is conducted by any accountant who conducts an audit of an issuer of securities to which section 10A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78j–1(a)) applies.

SEC. 1102. TAMPERING WITH A RECORD OR OTHERWISE IMPEDING AN OFFICIAL PROCEEDING.

‘‘(c) Whoever corruptly—

‘‘(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or
‘‘(2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.’’.