The Ethical Compass A Toolkit for Integrity in Business SOX Challenge www.KPMGUniversityConnection.com.

The Ethical Compass A Toolkit for Integrity in Business SOX Challenge www.KPMGUniversityConnection.com

2 The Ethical Compass A Toolkit for Integrity in Business

The SOX Challenge © 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 3

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 4 Overview Key Compass Concepts Description of the SOX Challenge Objectives of SOX Challenge Activity Framework for Discussion Sarbanes-Oxley Act of 2002 SOX Challenge Activity

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 6 Description of the SOX Challenge The SOX Challenge is an interactive student activity pertaining to the Sarbanes-Oxley Act of 2002, highlighting the importance of ethical behavior and professional conduct within the accounting profession. The SOX Challenge is accompanied by a presentation that will provide a framework for discussion pertaining to the components of the Sarbanes-Oxley Act and the importance of compliance with the Act.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 8 Objectives of SOX Challenge To enable students to: Recognize the fundamental principles of the Sarbanes-Oxley Act; Identify the articles and rules of the Sarbanes- Oxley Act; Heighten your awareness of the importance of being a member of the accounting profession and government compliance and governance.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 10 The Year of the “Perfect Storm” Unethical Behavior Fraudulent Activity Downturn in the Economy Massive Business Failures Audit Failures Election Year Result: The most significant legislation affecting the accounting profession since 1933 Securities Act and1934 Securities Exchange Act

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 11 Sarbanes-Oxley Act Intentions To restore investor confidence in financial reporting and public capital markets.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 12 Corporate Scandals

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 13 Year of 2002: Corporate Scandals A wave of accounting scandals were exposed with a number of prominent companies admitting to misstating their financial statements, giving a misleading impression of their status. * Conviction was subsequently overturned ENRON October 16, 2001 Issue: Off-Balance Sheet Accounting and Financial Reporting Fraud Impact: $3 billion in undisclosed losses ANDERSEN June 15, 2002 Issue: Convicted of obstruction of justice for shredding documents * related to its audit of Enron Impact: Demise of the United States' oldest accounting firm GLOBAL CROSSING January 31, 2002 Issue: Financial reporting fraud through improper revenue recognition Impact: $12.4 billion in overstated earnings ADELPHIA March 28, 2002 Issue: Financial reporting fraud and embezzlement Impact: $2.5 billion of hidden debt TYCO June 3, 2002 Issue: CEO and CFO accept millions in interest-free loans Impact: Over $200 million in fraud schemes WORLDCOM June 20, 2002 Issue: Financial reporting fraud Impact: $9 billion in unreported expenses

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 14 Enron Corporate Felons Jeffrey Skilling Former CEO of Enron convicted of multiple federal felony charges Kenneth Lee Lay Former Chairman (deceased) of Enron was indicted on 11 counts of securities fraud but never sentenced Andrew Fastow Former CFO of Enron created complex off- balance-sheet Special Purpose Entities to conceal massive losses

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 15 Other Corporate Felons Dennis Kozlowski Former CEO of Tyco International was convicted of misappropriating over $400 million of the company's funds John Rigas Adelphia’s former CEO and his sons were found guilty of concealing $2.3 billion in liabilities for personal use Bernard Ebbers Worldcom founder improperly recorded $11 billion in revenues and received $400 million in off-the-books loans

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 16 Sarbanes-Oxley Act of 2002 The ObjectivesThe Focus Improve corporate governance and rebuild public trust in corporate practices Corporate governance requirements Increase the accountability of management of public companies and enable a higher level of financial reporting transparency Enhanced disclosure requirements regarding financial statements and internal controls Increase the oversight of public accounting firms and audit quality Creation of the Public Company Accounting Oversight Board Place greater emphasis around efforts to prevent, detect, investigate, and remediate fraud and misconduct Increased criminal penalties and protection for whistle-blowers Restore investor confidence in the capital markets Scope increases and limitations of external auditors functions

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 17 The Goals Sarbanes- Oxley Act Reporting: Upgrade Disclosures Roles: Strengthen Corporate Governance Conduct: Expand Insider Accountability Enforcement: Increase Oversight Penalties: Broaden Sanctions Relationships: Heighten Auditor Independence

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 18 Existing Key Role the SEC The primary federal regulatory agency for the securities industry Promote full disclosure Protect investors against fraudulent and manipulative practices in the securities markets Securities and Exchange Commission (SEC) was established by the Securities Act of 1933 and the Securities Exchange Act of 1934.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 19 Sarbanes-Oxley Act of 2002 Enacted July 30, 2002; nine months after first announcement of Enron problems. Creates the Public Company Accounting Oversight Board or PCAOB, funded by accounting firms and registrants. Revises corporate governance standards. Adds new disclosure requirements. Creates new federal crimes related to fraud. Significantly increases criminal penalties for violations of the securities laws.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 20 History of the American Institute of Certified Public Accountants - AICPA 1921 ~ American Society of Certified Public Accountants ASCPA 1957 ~ American Institute of Certified Public Accountants AICPA 1936 ~ ASCPA merged into the AIA 1917 ~ American Institute of Accountants AIA 1916 ~ Institute of Public Accountants IPA 1887 ~ American Association of Public Accountants AAPA

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 21 Key Compass Concepts Description of the SOX Challenge Objectives of SOX Challenge Activity Framework for Discussion Sarbanes-Oxley Act of 2002 SOX Challenge Activity

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 22 The Sarbanes-Oxley Act 2002 Overview of Titles Title I–Public Company Accounting Oversight Board Title II–Auditor Independence Title III–Corporate Responsibility Title IV–Enhanced Financial Disclosures Title V–Analyst Conflicts Of Interest Title VI–Commission Resources And Authority Title VII–Studies & Reports Title VIII–Corporate & Criminal Fraud Accountability Title IX–White-Collar Crime Penalty Enhancements Title X–Corporate Tax Returns Title XI–Corporate Fraud & Accountability

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 24 Title I–Public Company Accounting Oversight Board Sec. 101. Establishment; administrative provisions. Sec. 102. Registration with the Board. Sec. 103. Auditing, quality control, and independence standards and rules. Sec. 104. Inspections of registered public accounting firms. Sec. 105. Investigations and disciplinary proceedings. Sec. 106. Foreign public accounting firms. Sec. 107. Commission oversight of the Board. Sec. 108. Accounting standards. Sec. 109. Funding.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 25 Section 101 Establishment of PCAOB Five members must be full-time and independent. Requires two CPAs to serve. Appointed by the Securities and Exchange Commission, not a government agency. Aim is to protect investors and other stakeholders of a public company. Ensure auditors of a company's financial statements have followed a set of strict guidelines. Public Law 107 – 204, 107 th Congress

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 26 Public Company Accounting Oversight Board New regulator for public accounting profession Three key functions of PCAOB: Establish standards for Accounting Firms Auditing quality control Ethics Independence Conduct inspections of firms to assess compliance with professional standards Take action to enforce PCAOB rules/standards

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 27 Section 107 Commission Oversight of the Board PCAOB empowered to enforce compliance with SEC Exchange Act of 1934 The SEC shall have oversight and enforcement authority over the PCAOB

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 28 Section 108 Workpaper Retention and Accounting Standards Mandates that the PCAOB establish Auditing Standards to require: Workpaper retention for 5 and 7 years Knowing violations of the workpaper retention rules carry penalties of up to 10 years in prison CPA firms utilize a second- partner review and approval of audit reports Testing of companies’ internal controls, including reporting of test results “Are you sure we need to retain all these workpapers?!”

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 29 PCAOB Standards In April 2003, the PCAOB adopted substantially all pre-existing standards issued by the AICPA Auditing Standards Board (ASB) to initially establish: “Standards of the PCAOB”

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 30 PCAOB Key Standards AS No. 1: References in Auditors’ Reports to the Standards of the PCAOB AS No. 2: Audit of Internal Control (Superseded by AS No. 5) AS No. 3: Audit Documentation AS No. 4: Reporting on Previously Reported Material Weakness Existence AS No. 5: An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements AS No. 6: Evaluating Consistency of Financial Statements AS No. 7: Engagement Quality Review AS No. 8: Audit Risk AS No. 9: Audit Planning AS No. 10: Supervision of the Audit Engagement AS No. 11: Consideration of Materiality in Planning and Performing an Audit AS No. 12: Identifying and Assessing Risks of Material Misstatement AS No. 13: The Auditor's Responses to the Risks of Material Misstatement AS No. 14: Evaluating Audit Results AS No. 15: Audit Evidence

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 32 Title II–Auditor Independence Sec. 201. Services outside the scope of practice of auditors. Sec. 202. Preapproval requirements. Sec. 203. Audit partner rotation. Sec. 204. Auditor reports to audit committees. Sec. 205. Conforming amendments. Sec. 206. Conflicts of interest. Sec. 207. Study of mandatory rotation of registered public accounting firms. Sec. 208. Commission authority. Sec. 209. Considerations by appropriate State regulatory authorities.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 33 Section 201 Services Outside the Scope of Practice Bookkeeping, Information systems design and implementation, Appraisals or valuation services, Actuarial services, Internal audits, Management and human resources services, Broker/Dealer and investment banking services, Legal or expert services related to audit services. Services are considered “unlawful” if provided to a publicly held company by its auditor

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 34 Section 203 Audit Partner Rotation Mandatory Auditor Rotation: Partner cannot be lead or concurring partner for more than 5 consecutive years. PARTNER … and stay out for 5 years!

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 35 Section 206 Conflicts of interest Cooling-off Period Requires a 1-year Cooling-off Period Audit firm cannot perform audit if CEO, CFO, controller, chief accounting officer, was employed by and participated in the audit 1-year prior to the start of the audit.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 37 Title III–Corporate Responsibility Sec. 301. Public company audit committees. Sec. 302. Corporate responsibility for financial reports. Sec. 303. Improper influence on conduct of audits. Sec. 304. Forfeiture of certain bonuses and profits. Sec. 305. Officer and director bars and penalties. Sec. 306. Insider trades during pension fund blackout periods. Sec. 307. Rules of professional responsibility for attorneys. Sec. 308. Fair funds for investors.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 38 Overview of Corporate Responsibility Audit Committee appoints Internal Auditor. Must evaluate the effectiveness of internal controls and disclose problems with controls and major fraud. Officers (CEO and CFO) must sign SEC filings and personally repay any bonus or stock profits received for 12 months after inaccurate filing. Prohibits insider trading during “blackout” periods. Attorneys must report material violations first to GC or CEO, then to Audit Committee.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 39 Section 302 Officer Responsibilities CEO & CFO must be personally involved in the disclosure process: Review all reports, Review specific issues addressed in the reports, Talk with key people who prepared the report, and Review reports with appropriate third parties. NO ONE CAN SIGN ON THEIR BEHALF!!!

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 41 Title IV–Enhanced Financial Disclosures Sec. 401. Disclosures in periodic reports. Sec. 402. Enhanced conflict of interest provisions. Sec. 403. Disclosures of transactions involving management and principal stockholders. Sec. 404. Management assessment of internal controls. Sec. 405. Exemption. Sec. 406. Code of ethics for senior financial officers. Sec. 407. Disclosure of audit committee financial expert. Sec. 408. Enhanced review of periodic disclosures by issuers. Sec. 409. Real time issuer disclosures.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 42 Title IV–Enhanced Financial Disclosures Off balance sheet transactions must be reported. Accuracy and completeness required in pro-formas. Ban on personal loans to officers and executives. SEC to define the responsibility of management for establishing adequate internal controls and reporting under 404. Establishment of a Code of Ethics

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 43 404 Certification Management assesses the internal control environment Annual report filed with SEC CEO & CFO signs the certification Certification establishes management’s responsibility and an assessment on the internal control environment for the year External auditor independently assesses the internal control environment External auditor attests to the assessment made by management

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 44 Section 404 The SOX Evaluation Process Establish internal control evaluation process. Determine significant controls and locations/business units to be included. Define project approach, milestones, time line, and resources. Launch project. Plan & Scope the Evaluation Document design of significant controls for all significant locations or business units. Document Controls Evaluate design and operating effectiveness of internal control over financial reporting and document results of evaluation. Evaluate Design & Operating Effectiveness Identify, accumulate, and evaluate design and operating control deficiencies; communicate findings and correct deficiencies. Identify & Correct Deficiencies Prepare management’s written assertion on the effectiveness of internal control over financial reporting. Report on Internal Control Prepare for independent auditor to conduct the internal control audit. Independent Audit of Internal Control

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 45 SOX 404 Framework Management assesses the internal control environment Annual report filed with SEC CEO & CFO signs the certification Certification establishes management’s responsibility & an assessment on the internal control environment for the year External auditor independently assesses the internal control environment External auditor attests to the assessment made by management SOX 404 Framework

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 46 Framework of Internal Control COSO Control Components Control Environment - The control environment sets the tone of an organization, influencing the control consciousness of its people Risk Assessment - Every entity faces a variety of risks from external and internal sources that must be assessed both at the entity and the activity level Control Activities - These policies and procedures help ensure management directives are carried out Information and Communication - Pertinent information must be identified, captured and communicated in a form and timeframe that supports all other control components Monitoring - Internal control systems need to be monitored; a process that assesses the quality of the system’s performance over time Section 404 addresses Internal Control over Financial Reporting!

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 47 Barriers to the effective implementation of controls Good controls on paper are not strictly followed in practice Grey areas in the rules – open to interpretation Lack of segregation of duties Collusion Management override Failure of senior management to lead by example Bureaucracy &/or formulaic compliance Failure to share knowledge of fraud experience, control weaknesses and control improvements Clash of cultures

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 48 Section 406 Code of Ethics for Senior Financial Officers Requires companies to state if they have adopted a written code of ethics for their principal officers Includes all management and reporting personnel! Companies must provide code of ethics disclosure in their annual reports.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 50 Title V–Analyst Conflicts of Interest Sec. 501. Treatment of securities analysts by registered securities associations and national securities exchanges. SEC established Section 501 to foster greater public confidence in securities research, and to protect the objectivity and independence of securities analysts.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 51 Section 501 Requirements Brokers and dealers to include in research reports certifications by the research analyst that the views expressed in the report accurately reflect his/her personal views. Disclose whether or not the analyst received compensation or other payments in connection with his/her specific recommendations or views. Broker-dealers would also be required to obtain periodic certifications by research analysts in connection with the analyst's public appearances.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 53 Title VI–Commission Resources and Authority Sec. 601. Authorization of appropriations. Sec. 602. Appearance and practice before the Commission. Sec. 603. Federal court authority to impose penny stock bars. Sec. 604. Qualifications of associated persons of brokers and dealers.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 55 Title VII–Studies & Reports Sec. 701. GAO study and report regarding consolidation of public accounting firms. Sec. 702. Commission study and report regarding credit rating agencies. Sec. 703. Study and report on violators and violations Sec. 704. Study of enforcement actions. Sec. 705. Study of investment banks.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 57 Title VIII–Corporate & Criminal Fraud Accountability Sec. 801. Short title. Sec. 802. Criminal penalties for altering documents. Sec. 803. Debts nondischargeable if incurred in violation of securities fraud laws. Sec. 804. Statute of limitations for securities fraud. Sec. 805. Review of Federal Sentencing Guidelines for obstruction of justice and extensive criminal fraud. Sec. 806. Protection for employees of publicly traded companies who provide evidence of fraud. Sec. 807. Criminal penalties for defrauding shareholders of publicly traded companies.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 58 Section 802 Criminal Penalties for Altering Documents Destruction, alteration, concealment of records or interference with an knowing investigation; violation fines and/or 20 years imprisoned. Workpapers that support the audit report must be retained for a seven-year period.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 59 Section 806 Protection for Employees who Provide Evidence of Fraud Several key considerations for ensuring Whistleblower protection and effective incident management are as follows: Establish multiple avenues for reporting compliance concerns. Employees must be informed that every effort will be made to keep their concerns confidential and/or anonymous. “Who do you want to report?”

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 61 Title IX–White Collar Crime Penalty Enhancements Sec. 901. Short title. Sec. 902. Attempts and conspiracies to commit criminal fraud offenses. Sec. 903. Criminal penalties for mail and wire fraud. Sec. 904. Criminal penalties for violations of the Employee Retirement Income Security Act of 1974. Sec. 905. Amendment to sentencing guidelines relating to certain white-collar offenses. Sec. 906. Corporate responsibility for financial reports.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 62 Overview of Title IX Penalties for conspiracy, mail fraud (5 - 20 years) and ERISA (1 - 10 years and up to $500,000) are increased. Criminal penalties for knowingly certifying inaccurate financial reports: up to $5,000,000 and 20 years. The CEO and CFO must certify that the periodic financial reports.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 63 Section 906 Corporate responsibility for financial reports The CEO and CFO must certify that the periodic financial reports fully comply with 1934 Securities Exchange Act and that the information fairly presents financial condition and results of operations.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 65 Title X–Corporate Tax Returns Section 1001 Sense of the Senate regarding the signing of corporate tax returns by chief executive officers. A sense of Congress statement is not law!

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 67 Title XI–Corporate Fraud & Accountability Sec. 1101. Short title. Sec. 1102. Tampering with a record or otherwise impeding an official proceeding. Sec. 1103. Temporary freeze authority for the Securities and Exchange Commission. Sec. 1104.Amendment to the Federal Sentencing Guidelines. Sec. 1105. Authority of the Commission to prohibit persons from serving as officers or directors. Sec. 1106.Increased criminal penalties under Securities Exchange Act of 1934. Sec. 1107. Retaliation against informants.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 68 Title XI–Overview Tampering with a record, destroying, mutilating or impeding, obstructing or attempting to influence an official investigation - up to 20 years. SEC can freeze extraordinary payments to executives, shareholders. Persons who have violated SEC laws may be barred from serving as officers or directors of public companies. Retaliation against informants is a crime, with up to a 10 years.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 69 Corporate Fraud & Accountability Criminal Penalties The law creates tough penalties for those who destroy records, commit securities fraud, fail to report fraud and retaliate against informants.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 70 Section 1102 Tampering Document Destruction A felony with penalties and up to 20 years of imprisonment knowingly destroying documents in a federal or bankruptcy investigation.

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 71 Section 1106 Increased Penalties Doubles the penalties for criminal violations of Securities Exchange Act of 1934!

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 72 Section 1107 Retaliation Against Informants Sweeping new protections for whistleblowers Two new criminal provisions to protect whistleblowers against retaliation

www.KPMGUniversityConnection.com 74 Ready for the SOX Challenge?

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 75 Click to start The SOX Challenge Game

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 76 The SOX Challenge Game 10 20 40 60 80 100 10 20 40 60 80 100 10 20 40 60 80 100 10 20 40 60 80 100 10 20 40 60 80 100 Corporate Scandals Enforcement & Penalties Accountability & Independence Reporting Disclosures Potpourri Points QUIT FINAL QUESTION

www.KPMGUniversityConnection.com 77

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 78 SOX Challenge Game Back to Game Board What is Enron? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 80 Back to Game Board This Texas based Energy company collapsed in 2001 as a result of financial reporting fraud. Reveal Answer SOX Challenge Game

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 82 SOX Challenge Game Back to Game Board Who is Jeffrey Skilling? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 84 Back to Game Board This former Enron CEO was convicted of multiple federal felony charges. Reveal Answer SOX Challenge Game

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 86 SOX Challenge Game Back to Game Board What is Global Crossings? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 88 Back to Game Board Of the many corporate scandals of 2002, this company was involved the highest dollar value of financial misstatement. Reveal Answer SOX Challenge Game

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 90 SOX Challenge Game Back to Game Board What is Obstruction of Justice? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 92 Back to Game Board SOX Challenge Game This charge was brought against Arthur Anderson in federal court in response to the destruction of audit documentation related to the audit of Enron. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 94 SOX Challenge Game Back to Game Board Who is Dennis Kozlowski? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 96 Back to Game Board SOX Challenge Game This Former CEO of Tyco International was convicted of misappropriating over $400 million of the company’s funds. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 98 SOX Challenge Game Back to Game Board What are Special Purpose Entities (SPEs)? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 100 Back to Game Board Originally created by Enron CEO Andrew Fastow, these companies facilitate financial fraud by hiding losses properly attributable to Enron in a process known as off- balance sheet financing. Reveal Answer SOX Challenge Game

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 102 SOX Challenge Game Back to Game Board What is the SEC? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 104 Back to Game Board SOX Challenge Game This government agency is the primary federal regulatory agency for the securities industry. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 106 SOX Challenge Game Back to Game Board What is Section 802? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 108 Back to Game Board SOX Challenge Game This section of SOX imposes a maximum penalty of 20 years in prison and fines for interfering in a federal investigation by destroying, altering, or concealing evidence. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 112 Back to Game Board SOX Challenge Game This section of SOX requires CEO’s and CFO’s to certify periodically that their company’s financial reports fully comply with 1934 Securities Exchange Act and that the information fairly presents financial condition and results of operations. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 114 SOX Challenge Game Back to Game Board What is 5,000,000 and 20 years in prison? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 116 Back to Game Board SOX Challenge Game This is the maximum penalty imposed by Title IX for knowingly certifying inaccurate financial statements. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 120 Back to Game Board This section of Title 11 doubled the dollar value of penalties for violations of the Securities and Exchange Act of 1934 Reveal Answer SOX Challenge Game

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 124 Back to Game Board SOX Challenge Game This section of SOX protects retaliation against informants (whistleblowers) attempting to expose financial fraud. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 126 SOX Challenge Game Back to Game Board What is management? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 128 Back to Game Board SOX Challenge Game The group that is responsible for the accuracy of financial reports issued by a company. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 132 Back to Game Board SOX Challenge Game This section of SOX specifies the services that are beyond the scope of practice for a firm that is performing the audit of a public company. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 134 SOX Challenge Game Back to Game Board What is 5 years? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 136 Back to Game Board SOX Challenge Game This is the maximum amount of time that an audit partner can serve as either the lead or concurrent partner on an audit in any ten year period under Section 203 of SOX. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 138 SOX Challenge Game Back to Game Board What is a cooling off period? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 140 Back to Game Board SOX Challenge Game This phrase is commonly used to describe the one year waiting period an Audit firm cannot perform audit services if CEO, CFO, controller, chief accounting officer, was employed by and participated in the audit 1-year prior to the start of the audit. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 144 Back to Game Board SOX Challenge Game This Section of SOX requires that a client’s auditors report directly to a company’s audit committee and not to the company’s management. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 146 SOX Challenge Game Back to Game Board What is nine (9) Sections? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 148 Back to Game Board SOX Challenge Game This is the number of sections that are contained in Title II-Auditor Independence of SOX. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 150 SOX Challenge Game Back to Game Board What is the Public Company Accounting Oversight Board? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 152 Back to Game Board SOX Challenge Game This entity was created by the Sarbanes Oxley Act of 2002 and is charged with creating standards for reporting disclosures. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 154 SOX Challenge Game Back to Game Board What is section 302? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 156 Back to Game Board SOX Challenge Game This Section of the Sarbanes Oxley Act of 2002 requires that a company’s CEO and CFO personally sign off on the company’s financial reports. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 160 Back to Game Board SOX Challenge Game This Section of Sarbanes-Oxley Act states that the company’s outside auditor must validate and attest to the accuracy of management’s assertions on its internal audit control program on an annual basis. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 162 SOX Challenge Game Back to Game Board What was 1957? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 164 Back to Game Board SOX Challenge Game This was the year the American Institute of Certified Public Accountants (AICPA) was founded. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 166 SOX Challenge Game Back to Game Board What is section 406? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 168 Back to Game Board SOX Challenge Game This section of SOX requires a company to disclose whether a company has a Code of Ethics. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 170 SOX Challenge Game Back to Game Board What is COSO? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 172 Back to Game Board SOX Challenge Game This framework for evaluating the internal control process over financial reporting is the most commonly used by company executives publishing reports to comply with Section 404. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 174 SOX Challenge Game Back to Game Board Who are Paul Sarbanes and Michael Oxley? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 176 Back to Game Board SOX Challenge Game This Senator and Congressman are credited with drafting the most significant legislation affecting the accounting profession since 1933 Securities Act and 1934 Securities Exchange Act -first and last names. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 178 SOX Challenge Game Back to Game Board What is Title IX? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 180 Back to Game Board SOX Challenge Game This title of SOX is also known as the White Collar Crime Penalty Enhancements. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 182 SOX Challenge Game Back to Game Board What is Adelphia? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 184 Back to Game Board SOX Challenge Game This family run corporation reported financial statements that hide over $2.5 billion of debt and the senior officers of the company were found guilty of embezzlement on March 28, 2002. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 186 SOX Challenge Game Back to Game Board What is PCAOB Audit Standard #2? Back to Question

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 188 Back to Game Board SOX Challenge Game Of the five Audit Standards published, this provision was superseded by Audit Standard #5. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 192 Back to Game Board SOX Challenge Game The SEC established this section to foster greater public confidence in securities research, and to protect the objectivity and independence of securities analysts. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 196 Back to Game Board SOX Challenge Game This section of Title X provides a Sense of the Senate regarding the signing of corporate tax returns by chief executive officers. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 198 Back to Game Board Final Question Challenge Reveal Answer Reveal Final SOX Challenge Question Risk your points

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 199 Back to Game Board Final Question Challenge These are the five main objectives for the enactment of the Sarbanes-Oxley Act of 2002. Reveal Answer

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 200 Five main objectives of SOX What is: Improve corporate governance and rebuild public trust in corporate practices Increase the accountability of management of public companies and enable a higher level of financial reporting transparency Increase the oversight of public accounting firms and audit quality Place greater emphasis around efforts to prevent, detect, investigate and remediate fraud and misconduct Restore investor confidence in the capital markets Game Over!

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved. The Ethical Compass – SOX Challengewww.KPMGUniversityConnection.com 201 Congratulations! You are all Sarbanes-Oxley Specialists!

www.KPMGUniversityConnection.com 202 Questions?

The Ethical Compass A Toolkit for Integrity in Business SOX Challenge www.KPMGUniversityConnection.com.

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