Since the Sarbanes-Oxley Act was passed in July 2002 hundreds—if not thousands—of articles, white papers and books have been written about the legislation. Most analysts in the field agree that Sections 302 and 404 of SOX are the most complex and costly of what is widely regarded as the most onerous piece of the corporate governance legislation.

Section 302 requires management—specifically, the CEO and CFO—to sign off on financial statement fairness and internal control effectiveness, and has been in full force since August of 2003.

Section 404 requires a separate management report on internal control effectiveness and audit by the financial statement auditor. It becomes effective for large companies starting with years ended after Nov. 15, 2004. Effective dates for smaller companies and foreign companies governed by the SEC commence in 2005.

Section 906 is related to Sections 302 and 404, and requires that CEOs and CFOs ensure all financial reporting—including annual and periodic reports—fairly presents, in all material respects, the financial condition and results of operations of the issuer and that they conform and comply with the Act. It also provides for significant criminal penalties for non-compliance.