Household HSBC Watch

To comply with the Sarbanes-Oxley Act, a company must document every internal process and external effect that will have an impact on its financial health. When the act went into effect many companies did not report on time. Predatory lenders might not be able to hide scams which result in a huge number of customer complaints.

A previous deadline, met by an additional 70 or so companies not required to certify until later, did bring about restatements by consumer lender Household International and advertising consortium Interpublic.

The law says that chief executive and chief financial officers of all U.S. public companies must sign off on quarterly and annual filings if they believe them to be complete and accurate. But unlike the SEC’s request, with its vague consequences outside of public pillory, the Sarbanes-Oxley Act has some teeth. It spells out potential fines and punishments for executives that knowingly push through false results.