Corporate and Professional Responsibility: Section 307 of the Sarbanes-Oxley Act of 2002

10/31/2002

The recent accounting frauds and corporate scandals have many in-house counsel, as well as directors and officers, re-examining their responsibilities, obligations, and potential liabilities.  New legislation, SEC regulations, stock exchange listing standards and public, media and shareholder scrutiny are imposing new or expanded processes for corporate accountability, financial reporting and business practices.  Tax-exempt organizations will likely see state attorneys general and the IRS address the integrity of financial disclosures and corporate accountability.  Legal standards and ethical norms are being reevaluated and changed to respond to the corporate misdeeds and capital market excesses.  In such an environment, in-house counsel are having to confront sweeping changes in their own professional responsibility requirements and corporate role.  The compliance and corporate ethics programs of health care organizations, whether publicly-traded, funded by private equity or tax-exempt, will be a focus of reform for in-house counsel to ensure that procedures and systems are in place and operating effectively to detect and prevent illegal or improper conduct.

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