SEC/PCAOB UPDATE

Pennsylvania CPA Journal, July, 2007 by Iacono, Christopher A; Stroup, Stephen G

Revamp Section 806 of Sarbanes-Oxley

"Section 806 appears to have not provided enough encouragement and protection for whistleblowers."

Sarbanes-Oxley Act's Section 806 is intended to encourage and protect whistleblowers. The law prohibits companies from discriminating or retaliating against employees who "provide information, cause information to be provided, or otherwise assist in the investigation regarding any conduct which the employee reasonably believes constitutes violation" of selected federal fraud statutes. Section 806, however, appears to have not provided enough encouragement and protection. In fact, in its current form, Section 806 may be deterring corporate employees from disclosing instances of potential fraud. There are three principal reasons for this...

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