SARBANES-OXLEY Act (SOX) increased the risk and responsibility of chief executive and chief finance officers (officers) of publicly traded companies. SOX increased accountability and visibility of the officers within public companies by broadening the scope of responsibility of adhering to regulations and reporting of fraudulent activities from lawyers to independent auditors of the company. The SOX provisions that directly or indirectly impact officers include, but are not limited to introduction of new and/or enhanced existing requirements: internal controls, disclosure, criminal penalties, and role of audit committee. Also, each measure an officer is responsible for creating or maintaining requires a formal certification and is subsequently
Under Section 404 of the act, these findings must detail any uncovered control deficiencies or instances of employee fraud, and must also be reviewed and attested by the registered accounting firm. The authors of the report must certify that the report does not contain any false information, misleading statements or significant omissions, and that the financial statements and information included in the report accurately represent the financial condition of the company. Under Section 401 of the act, this representation must account for both balance and off-balance sheet debts, obligations and transactions in order to facilitate maximum transparency for shareholders (Nikolas, Daniel. Nd Effects of the Sarbanes-Oxley Act). The act serves as a guideline and governs what an accountant should and should not do when reporting financial flows.
In order to make a decision in this dilemma the stakeholders needed to be identified. Stakeholders are people who are directly affected by the situation. In this simulation the stakeholders are as follows: shareholders, Chief Legal Officer, VP Human Resources, Manager, Jamal Moore, and Aaron Webb. After identifying the stakeholders the manager must identify his or her duties regarding the situation. In this case it is the manager’s duty not to reward employee’s who violate the code of conduct or the law and ensure privileged information is not made public ("Ethicsgame.com", 2012).
During the late 1990 and the early 2000, accounting firm started to seek opportunity to client, and in October 2001, Enron became the subject of a SEC investigation, and then in 2002 congress passed the government regulation called Sarbanes-Oxley Act, and finally government established PCAOB. 2-19: C. As for A, management and external auditor share same responsibility is not correct. It depends on many other factors. As for B, it is not correct because both have a significant responsibility. As for D, this is not for guarantee.
All auditors are held to a code of ethics. The main principles in this code include integrity, objectivity, confidentiality and competency. Ethics case 1-8 asks the question, “How might an auditor’s ethics be challenged while performing an audit?” It is argued that an auditor cannot be truly objective if they are collecting a fee from the company whom they are auditing (Spiceland, Sepe, & Nelson, 2013). For this case we will focus on objectivity. As an auditor one is required to remain objective, an auditor should at all times remain independent in fact and appearance.
The North Face, Inc. Questions 1. Should auditors insist that their clients accept all proposed audit adjustments, even those that have an “immaterial” effect on the given financial statements? Defend your answer. Auditors should not require their clients to accept and correct all the adjustments.
The Public Company Accounting Over-sight Board (PCAOB) has oversight and enforcement authority and establishes auditing, quality control, and independence standards and rules. ● Implements stronger independence rules for auditors. Audit partners, for example, are required to rotate every five years and auditors are prohibited from offering certain types of consulting services to corporate
AUDIT PROGRAM DESIGN ACC/546 Anderson, Olds, Watershed, CPAs 111 Rock St Denver, CO 80465 Larry Lancaster Apollo Shoes, Inc 100 Shoe Plaza Shoetown, ME 00001 Mr. Lancaster The audit of financial statements will assess the internal controls in use by the organization and mandated by the Sarbanes-Oxley Act (SOX) of 2002. The purpose of SOX is to incorporate corporate responsibility relating to issues of financial reporting. Section 404 focuses on the internal controls that have been implemented by the company as the internal controls are designed to protect the organizations assets from loss. The internal controls also help the organization to streamline processes so that organizational goals can be achieved with the best rate of return when using available assets. This letter serves to provide Mr. Lancaster with an overview of section 404 and other regulations that relate to the audit of internal controls as well as a synopsis of internal control risks that have and will be identified within Apollo Shoes Inc.
Sarbanes-Oxley influenced public businesses through transformation of the financial system. Public companies required to comply with Sarbanes-Oxley incur additional costs directly attributed
According the legal dictionary an incorporated company is formed with the approval from the state in which the corporation is being formed. This corporation is an artificial person, that is someone who does not exist. The organization can sue and be sued, that is unless it is non-profit. A corporation can sell shares of stock if needed. An corporations liability is limited to its assects, so the owner or the shareholders are protected from personal claims unless they commit fraud.