Sarbanes-Oxley Act Assignment

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The following is the topic for this week's team assignment: The Sarbanes-Oxley Act (SOX) signed into law in July 2002 was intended to improve the accuracy of the financial statements prepared by publicly held companies. Carefully read the summary of this Act. A. Discuss how this law is likely to affects issues of : Audit committees of public company boards of directors Increased the workload and the integrity of these officials has fired some officials and made it a more rigorous job to pursue because of the seriousness of the day to day operations The act created the Public Company Accounting Oversight Board to police the accounting profession and set auditing standards. It shored up the role of the audit committee, making it…show more content…
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…show more content…
● ● Requires codes of ethics for senior financial officers. In addition, Section 404 of the Sarbanes-Oxley Act requires public companies to attest to the effectiveness of their internal controls over financial reporting. 29. Some major challenges facing the accounting profession relate to the following items: Nonfinancial measurement—how to report significant key performance measurements such as customer satisfaction indexes, backlog information and reject rates on goods purchased. Forward-looking information—how to report more future oriented information. Soft assets—how to report on intangible assets, such as market know-how, market dominance, and well-trained employees. Timeliness—how to report more real-time information. The law was spawned by massive inaccuracies and massive restatements. So all the changes in the law were designed to improve — and have improved — the accuracy of financial

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