Assignment Sarbanes Oxley - Assignment Sarbanes-Oxley Act...

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Assignment Sarbanes-Oxley Act Student: Munkhjargal Namsrai Instructor: Dr. Micheal Ortman Introduction:
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Sarbanes-Oxley act designed In July, 2002 for financial control because of Enron and WorldCom’s messy control of accounting. Sarbanes-Oxley act is a standard for corporate accountability for acts of wrongdoing and it includes how corporate boards and executives must interact with each other and with corporate auditors. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclose. Basically Sarbanes-Oxley act is for to have strong audit control in US business. 1. Examine an auditing issue that is impacted by Sarbanes-Oxley. Sarbanes-Oxley act contains 11 sections, ranging from additional corporate board responsibilities to criminal penalties. Securities and Exchange Commission (SEC) does the implement rulings on requirements. Securities and Exchange Commission created The Public Company Accounting Oversight Board (PCAOB). The Public Company Accounting Oversight Board charges with overseeing, regulating, inspecting and disciplining accounting firms in their roles as auditors of public companies. Also PCAOB establish auditing and related attestation, quality control, ethics, and independence standards and rules to be used by registered public accounting firms in the preparation and issuance of audit reports. The PCAOB conducts annual inspections of firms that audit more than 100 issuers and firms that provide audit reports for fewer issuers at least every three years. The Sarbanes-Oxley Act requires all financial reports to include an internal control report. Also, The Act required expanding financial requirements by public companies. For example, material correcting adjustments to the financial statements that are proposed by the auditors, material off-balance sheet transactions, relationships with unconsolidated entities, material changes in financial condition and operations, a report on internal controls, etc. This is designed 2
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to show that not only are the company's financial data accurate, but the company has confidence in them because adequate controls are in place to safeguard financial data. Year-end financial reports must contain an assessment of the effectiveness of the internal controls. The issuer's auditing firm is required to attest to that assessment. The auditing firm does this after reviewing
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