A Chinese wall is most commonly employed in investment banks, between the corporate-advisory area and the brokering department in order to separate those giving corporate advice on takeovers from those advising clients about buying shares.
The "wall" is thrown up to prevent leaks of corporate inside information, which could influence the advice given to clients making investments, and allow staff to take advantage of facts that are not yet known to the general public.
PCAOB (Public Company Accounting Oversight Board)
The PCAOB sets and enforces auditing, quality control, ethics, independence and other standards relating to audit reports.
New rules for auditors
Auditors must report specific information to the company's audit committee.
New roles for audit committees
Audit committee members must be on the company's board of directors and be independent of the company.
New rules for management
Requires the CEO and CFO to certify that financial statements and disclosures are firly presented.
New internal control requirements (Section404)
Management is responsible for establishing and maintaining an adequate internal control structure and appropriate control procedures.
Increases responsibility and accountability of CEO's and directors:
Section 302:Managers must evaluate the disclosure controls on a quaterly basis.
Section 404:Mangers must document, test, and evaluate controls.
Increases white-collar crime penalties.
Auditors and consulting:
seperate auditors and consulting functions.
Active and deliberate threats: Fraud/ Embezzlement/ Sabotage