FORENSIC ACCOUNTANTS, SARBANES-OXLEY, AND AUDIT STANDARDS

FORENSIC ACCOUNTANTS, SARBANES-OXLEY, AND AUDIT STANDARDS -...

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FORENSIC ACCOUNTANTS, SARBANES-OXLEY, AND AUDIT STANDARDS Janet L. Colbert, Cr.FA, PhD, CPA, CIA James R. Meany Professor of Accounting 506 Grise Hall Gordon Ford College of Business Bowling Green, KY 42101 phone 270.745.2971 fax 270.745.5953 [email protected] NOTE: Please do not quote without permission.
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FORENSIC ACCOUNTANTS, SARBANES-OXLEY, AND AUDIT STANDARDS ABSTRACT Forensic accountants are not specifically mentioned in the Sarbanes-Oxley Act passed last year. However, the Act potentially has significant impact on forensic accountants. These experts may be called upon to assist the corporation in its quest to ensure compliance with the mandates of S-O. Also, the public accounting firm performing the independent audit of the financial statements may request help from forensic experts. As they prepare to attest to both management’s fair presentation of the financial statements and report on controls, as required by S-O, and to comply with the accounting profession’s own rules regarding fraud, auditors may turn to forensic accountants. Key words: Sarbanes-Oxley, SAS 99, fraud
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FORENSIC ACCOUNTANTS, SARBANES-OXLEY, AND AUDIT STANDARDS INTRODUCTION Much of the attention given to the Sarbanes-Oxley Act since its passage has been focused on the requirements applicable to public companies and their auditors. The law also has significant implications for forensic accountants. Such professionals may be called upon to assist the entity in complying with Sarbanes-Oxley and also to aid the auditors performing the engagement, who must also consider their own profession’s standards. Thus, forensic accountants should have an understanding of those sections of the Act and audit standards most likely to be relevant to their work with the two groups. REQUIREMENTS FOR THE CORPORATION Four topics in the Sarbanes-Oxley Act (S-O) are particularly applicable to those forensic experts who are asked to assist the company in ensuring compliance. Certification by the officers of the financial statements and their report on internal control and fraud are areas in which the entity may request help. Also, the entity may seek assistance in complying with the Act’s provisions regarding influencing the auditor and understanding penalties for noncompliance. Certification S-O requires the principal executive officer and the principal financial officer to certify the annual and quarterly reports for all periods presented. By signing, the officers are asserting that they have reviewed the report and that the financial statements are, in
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all material respects, presented fairly. Further, they are indicating that, based on their knowledge, the report does not contain any material untrue statement or omission. Internal Control, Disclosure Controls, and Fraud
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This note was uploaded on 03/23/2010 for the course ACC_ 01 taught by Professor Zeegal during the Fall '10 term at Missouri State University-Springfield.

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FORENSIC ACCOUNTANTS, SARBANES-OXLEY, AND AUDIT STANDARDS -...

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