Audit%20Rotation-1%20Final

Audit%20Rotation-1%20Final - By: The Goon Squad (Prerak...

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By: The Goon Squad ( Prerak Patel, Roman Levit, Gerry Mudjer, Maulik Patel)
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Sarbanes-Oxley Act of 2002 Purpose Additional auditor assurance Oversight / Regulation Financial reporting Strengthen Internal Control Create auditor independence Audit-client relationship
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Sarbanes-Oxley Act of 2002 Rules Established: Report to Audit Committee Not management Prohibits Non-Audit Activities Example: Consulting Mandatory audit partner rotation PCAOB Oversight
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Effective Measures?
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History – Audit Firm Rotation 1977 – Cohen Commission Big Eight’s Independence Benefit Auditor resist managerial pressure New viewpoint Problem Inefficiency Increased competition
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History – Audit Firm Rotation 1994 Internal Control Periodical Partner Rotation Secondary Partner Overview Unnecessary
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History – Audit Firm Rotation 2002 Benefits Auditors review auditors Fresh viewpoint Problem Investors lose trust Very expensive
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PCAOB and other agencies want more measures
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Audit%20Rotation-1%20Final - By: The Goon Squad (Prerak...

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