What is Sarbanes-Oxley?
Passed in 2003 in the wake of numerous corporate
scandals, the American Competitiveness and Corporate
Accountability Act – more commonly referred
to as the Sarbanes-Oxley Act - requires publicly-traded
companies to conform to new standards in governance,
financial operations, and audit procedures. Although
these standards currently apply only to corporations,
many nonprofits and foundations are using Sarbanes-Oxley
as a framework for developing new governance guidelines
for their own operations.
Recommended Practices
One of the primary recommendations for improved
governance practices as a result of the Sarbanes-Oxley
Act is the establishment of an Audit Committee
to develop and maintain adequate reporting procedures
for the organization. Separate from the role of
the Finance Committee, the Audit committee provides
independent oversight of the organization’s
accounting and financial reporting, as well as
overseeing a broad range of activities relative
to governance, ethics, internal controls, recordkeeping,
and operational polices and procedures.
In addition, Sarbanes-Oxley called for the development
of regulations for document destruction/retention
and policies for whistleblower protection.
View these sample documents from the National
Council of Nonprofit Associations:
•
Audit Committee Roles and Responsibilities
•
Sample Audit Committee Charter 
•
Whistleblower Policy
•
Document Destruction/Retention Policy
ADDITIONAL RESOURCES:
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