Improved investor protection against financial fraud was the catalyst to the Sarbanes-Oxley Act. Known as SOX or Sarbox, the act was signed into law in July 2002. SOX made major changes to corporate governance, accounting oversight and financial disclosure. The law established rules for auditor independence and corporate responsibility to “protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.”
Section 301 of Sarbanes-Oxley deals with public company audit committees. It requires “Each member of the audit committee shall be a member of the board of directors of the issuer, and shall otherwise be independent.”
The audit committee is required to establish procedures for the "receipt, retention, and treatment of complaints" regarding accounting, internal controls, and auditing.
The audit committee is also required to establish procedures for “the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.”
Here is a list of links to give you a more detailed look at the Sarbanes-Oxley Act.
From the FDIC
Guidance on Implementing a Fraud Hotline
More from the FDIC
More on Fraud Hotlines
Financial and Accounting Disclosure Information
Home for Sarbanes-Oxley Act