Chap 1 Notes_Part_12 - 1 State the pros and cons of those...

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Forces Promoting Quality Audits Cost/Benefit Debate on the Sarbanes-Oxley Act (SOX) SOX is unnecessary regulation of the profession. The costs of requirements, such as reporting on the effectiveness of internal control over financial reporting, greatly exceeds the benefits. These increased costs will discourage companies from issuing public traded such stock in the United States. The regulation also gives a competitive advantage to international CPA firms because they are best prepared to meet the increased requirements of the Act. Three things already provide sufficient assurance that quality audits are performed without PCAOB oversight. They are competitive pressures to do quality work, legal liability for inadequate performance, and a code of professional conduct requiring the CPA firms follow generally accepted auditing standards.
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