Candour website use - confidentiality
Individuals accessing the Candour website hereby agree not to disclose or attempt to use or personally benefit from any Confidential Information, as defined below, to which you may gain access via this website.
This Confidentiality provision shall continue until such time as the information becomes available in the public domain, other than through unauthorised disclosure by yourself or others.
For the purposes of this agreement, Confidential Information shall include:
project related data including, but not limited to, client, title, description or substance;
business information related to Candour or to any Candour Client;
any other confidential information of Candour or its Clients, and
any intellectual property, including, without limitation, knowledge, know-how, trade secrets or copyrighted information of Candour or its Clients.
Where Confidential Information is required to be disclosed by law, by any governmental or other regulatory authority or by a court of competent jurisdiction, or you have been given notice that such disclosure is being sought, you agree to immediately notify Candour and cooperate fully with Candour and/or Candour’s Client in limiting such disclosure to the extent possible under applicable law.
ANTI-BRIBERY and CORRUPTION
Candour is fully committed to the prevention of bribery and corruption. Candour expressly prohibits improper payments in business dealings irrespective of the country in which these are made. Any improper payments or receipts including any offer or agreement to make or accept any form of facilitation payment, or “greasing” or “enabling payment”, is never acceptable, regardless of any potential loss of business. Strict adherence to this Code must be observed at all times.
Both Candour and Candour Personnel are subject to anti-bribery legislation, the most significant to us being:
US Foreign Corrupt Practices Act 1977 (“FCPA”)
The US FCPA is targeted specifically at the bribery of government and foreign officials only, both within the US and internationally.
UK Bribery Act 2010 (“Bribery Act”)
The UK Bribery Act has a much wider scope where it is an offence to give, promise and/or offer a bribe, inducement or improper payment to anyone with the intention of obtaining a business advantage. It applies not just to government and foreign officials but also to business persons in the public and private sectors. It also has international reach for UK personnel and companies, or personnel of any nationality working for a UK entity.
No business advantage need actually have been obtained in order for an offence to have taken place. The Bribery Act makes it an offence to offer or accept a bribe and it also creates a specific corporate offence of failing to prevent bribery. The penalties set out in the Bribery Act apply to both companies and individuals. Companies convicted under the Bribery Act face unlimited fines. Individuals also face unlimited fines as well as imprisonment for up to 10 years.
Irrespective of the work location, all Candour Personnel must comply with both of the above pieces of legislation, which have international scope, as well as any other anti-bribery laws existing in the countries within which we work.
U.S. SECURITIES AND EXCHANGE COMMISSION
The information provided below is by way of background only and should not be considered as advice or guidance. Candour accepts no responsibility or liability for the accuracy or completeness of the information, nor for any actions taken based on the information provided.
More detailed information is available here: https://www.sec.gov/
Disclosure Laws and Regulations
The current system of mandatory corporate disclosure began in the 1930s with the passage of the Securities Act of 1933 and the Securities Exchange Act of 1934. These acts as well as subsequent legislation related to disclosure have been implemented by rules and regulations of the Securities and Exchange Commission (SEC).
Disclosure laws are designed to protect investors through the disclosure of business and financial information that could be considered relevant to making an investment decision. Since private companies do not raise money from the investing public, they are not subject to the same disclosure laws as public companies. Investors in private companies are considered to be sufficiently well informed about their investment decisions so as not to require the protection of disclosure laws.
Companies that are privately owned are not required by law to disclose detailed financial and operating information in most instances. They enjoy wide latitude in deciding what types of information to make available to the public. Small businesses and other enterprises that are privately owned may shield information from public knowledge and determine for themselves who needs to know specific types of information.
Companies that are publicly owned, on the other hand, are subject to detailed disclosure laws about their financial condition, operating results, management compensation, and other areas of their business.
While these disclosure obligations are primarily linked with large publicly traded companies, many smaller companies choose to raise capital by making shares in the company available to investors. In such instances, the small business is subject to many of the same disclosure laws that apply to large corporations. Disclosure laws and regulations are monitored and enforced by the U.S. Securities and Exchange Commission (SEC).
All of the SEC's disclosure requirements have statutory authority, and these rules and regulations are subject to changes and amendments over time. Some changes are made as the result of new accounting rules adopted by the principal rule-making bodies of the accounting profession. In other cases, changes in accounting rules follow changes in SEC guidelines. For example, in 2000 the SEC imposed new regulations to eliminate the practice of "selective disclosure," in which business leaders provided earnings estimates and other vital information to analysts and large institutional shareholders before informing smaller investors and the rest of the general public. The regulation forces companies to make market-sensitive information available to all parties at the same time. Dramatic and sweeping amendments were made to the SEC's disclosure rules in the summer of 2002 with the passage of the Sarbanes-Oxley Act, often referred to simply as Sarbanes-Oxley, Sarbanes, or SOX.
THE SARBANES-OXLEY ACT
The Sarbanes-Oxley Act came about because of the stunning and unexpected bankruptcy filed by Enron, an enormous energy-trading company in late 2001. This bankruptcy filing was the largest to date in 2001, it cost investors billions and employees lost far more than their jobs, many lost their life savings. The Enron debacle would have been prevented if audits of the company had detected accounting irregularities or if the company would have been required to disclose transactions not directly reflected on its balance sheet. To a large extent, Enron's failure was the result of corrupt practices. Concern quickly grew about how easily these practices had been carried out and hidden from investors and employees alike.
Sarbanes-Oxley was principally a reaction to this failure. However, during this same period, the equally dramatic actual or pending bankruptcies of WorldCom, a long-distance telecommunications company, and Tyco, a diversified equipment manufacturer, influenced the content of the legislation. SOX thus deals with 1) reform of auditing and accounting procedures, including internal controls, 2) the oversight responsibilities of corporate directors and officers and regulation of conflicts of interest, insider dealings, and the disclosure of special compensation and bonuses, 3) conflicts of interest by stock analysts, 4) earlier and more complete disclosure of information on anything that directly and indirectly influences or might influence financial results, 5) criminalization of fraudulent handling of documents, interference with investigations, and violation of disclosure rules, and 6) requiring chief executives to certify financial results personally and to sign federal income tax documents. The provisions of SOX have significantly changed SEC disclosure requirements.
In a very real sense, SOX has changed the very regulatory authority upon which the SEC operates. For a detailed discussion of the provisions of Sarbanes-Oxley, refer to the essay by the same name in this volume.
SEC DISCLOSURE OBLIGATIONS
SEC regulations require publicly owned companies to disclose certain types of business and financial data on a regular basis to the SEC and to the company's stockholders. The SEC also requires disclosure of relevant business and financial information to potential investors when new securities, such as stocks and bonds, are issued to the public, although exceptions are made for small issues and private placements. The current system of mandatory corporate disclosure is known as the integrated disclosure system. By amending some of its regulations, the SEC has attempted to make this system less burdensome on corporations by standardizing various forms and eliminating some differences in reporting requirements to the SEC and to shareholders.
Publicly owned companies prepare two annual reports, one for the SEC and one for their shareholders. Form 10-K is the annual report made to the SEC, and its content and form are strictly governed by federal statutes. It contains detailed financial and operating information, as well as a management response to specific questions about the company's operations.
Historically, companies have had more leeway in what they include in their annual reports to stockholders. Over the years, however, the SEC has gained more influence over the content of such annual reports, primarily through amending its rules on proxy statements. Since most companies mail annual reports along with their proxy statements, they must make their annual stockholder reports comply with SEC requirements.
SEC regulations require that annual reports to stockholders contain certified financial statements and other specific items. The certified financial statement must include a two-year audited balance sheet and a three-year audited statement of income and cash flows. In addition, annual reports must contain five years of selected financial data, including net sales or operating revenues, income or loss from continuing operations, total assets, long-term obligations and redeemable preferred stock, and cash dividends declared per common share.
Annual reports to stockholders must also contain management's discussion and analysis of the firm's financial condition and results of operations. Information contained therein includes discussions of the firm's liquidity, capital resources, results of operations, any favourable or unfavourable trends in the industry, and any significant events or uncertainties. Other information to be included in annual reports to stockholders includes a brief description of the business covering such matters as main products and services, sources of materials, and status of new products. Directors and officers of the corporation must be identified. Specific market data on common stock must also be supplied.
Securities Industry Regulations
Additional disclosure laws apply to the securities industry and to the ownership of securities. Officers, directors, and principal stockholders (defined as holding 10 percent or more of the company's stock) of publicly owned companies must submit two reports to the SEC. These are Form 3 and Form 4. Form 3 is a personal statement of beneficial ownership of securities of their company. Form 4 records changes in such ownership. These reporting requirements also apply to the immediate families of the company's officers, directors, and principal stockholders. Individuals who acquire 5 percent or more of the voting stock of a SEC-registered company, meanwhile, must also submit notification of that fact to the SEC.
Securities broker-dealers must provide their customers with a confirmation form as soon as possible after the execution of an order. These forms provide customers with minimum basic information required for every trade. Broker-dealers are also responsible for presenting the prospectus to each customer for new securities issues. Finally, members of the securities industry are subject to reporting requirements of their own self-regulating organizations. These organizations include the New York Stock Exchange (for listed securities transactions) and the National Association of Securities Dealers (for over-the-counter traded securities).
DISCLOSURE RULES OF THE ACCOUNTING PROFESSION
Generally accepted accounting principles (GAAP) and specific rules of the accounting profession require that certain types of information be disclosed in a business's audited financial statements. As noted above, these rules and principles do not have the same force of law as SEC rules and regulations. Once adopted, however, they are widely accepted and followed by the accounting profession. Indeed, in some instances, disclosures required by the rules and regulations of the accounting profession may exceed those required by the SEC.
It is a generally accepted accounting principle that financial statements must disclose all significant information that would be of interest to a concerned investor, creditor, or buyer. Among the types of information that must be disclosed are financial records, accounting policies employed, litigation in progress, lease information, and details of pension plan funding. Generally, full disclosure is required when alternative accounting policies are available, as with inventory valuation, depreciation, and long-term contract accounting. In addition, accounting practices applicable to a particular industry and other unusual applications of accounting principles are usually disclosed.
Certified financial statements contain a statement of opinion from an auditor, in which the auditor states that it is his or her opinion that the financial statements were prepared in accordance with GAAP and that no material information was left undisclosed. If the auditor has any doubts, then a qualified or adverse opinion statement is written.