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Unformatted text preview: Reflection and Self-assessment 4.1 Compare the content and purpose of the FCPA and SOX. What similarities and differences do you notice? If a non-accountant asked you how you know that financial statements are fair and reliable, what would you say? The purpose of the FCPA and SOX is to ensure the integrity and the confidence of the United States business practices by strengthening the internal control. The difference between these two lies in where these legislations want to emphasize. FCPA emphasizes more international issues such as bribery in foreign countries and the integrity of the United State business practices around the world. The internal control in this legislation seems to be a responsibility for anyone in an entity. On the other hand, SOX does highlight the importance of the internal control and the management of the entities is mainly responsible for it. SOX seems to define internal control in more details. Financial statements are fair and reliable when they represent what they are supposed to present and the information is verifiable. For instance, according to conceptual framework number 3, “Assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.” As the result, things are recorded in assets section in any financial statement should be based on that definition. If certain amount of US dollars is indicated as the value of that asset, there should be documents to go back and check for its accuracy. Moreover, financial statements are fair and reliable when they are readable. It means that the financial statements should follow the usual listing order; for example, in balance sheet, there will be a section of assets, liabilities, etc… Reflection and Self-assessment 4.2 Think about risks you have taken today. For example, you risked that your car wouldn’t start when you came to school. You may have taken a risk in leaving your house, residence hall or apartment later than usual. List six additional risks you’ve taken today, and organize them in some way that makes sense to you....
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- Summer '10
- Enterprise risk management, PeopleSoft