What accounting issues does the Sarbanes-Oxley Act of 2002 address?
The Sarbanes-Oxley Act (SOX) was triggered by the bankruptcies and alleged audit failures involving such companies as Enron and WorldCom.
Before SOX, the Auditing Standards Board (ASB) of the AICPA established auditing standards for private and public companies. The PCAOB, which is appointed and overseen by the SEC, now has responsibility for auditing standards for public companies. The ASB continues to oversee private companies.
An issue that SOX addresses is additional regulation for public companies and their auditors. Auditors are required to attest to management reports on the effectiveness of internal control over financial reporting under Section 404. The Act particularly addressed and changed the relationship between publicly help companies and their audit firms.
Auditor independence was another key issue of the Act.
The titles of the Act are:
TITLE I. PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD
TITLE II—AUDITOR INDEPENDENCE
TITLE III—CORPORATE RESPONSIBILITY
TITLE IV—ENHANCED FINANCIAL DISCLOSURES
TITLE V—ANALYST CONFLICTS OF INTEREST
TITLE VI—COMMISSION RESOURCES AND AUTHORITY
TITLE VII—STUDIES AND REPORTS
TITLE VIII—CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY
TITLE IX—WHITE-COLLAR CRIME PENALTY ENHANCEMENTS
TITLE X—CORPORATE TAX RETURNS
TITLE XI—CORPORATE FRAUD AND ACCOUNTABILITY
Here is a link to the legislation
http://www.pcaobus.org/About_the_PCAOB/Sarbanes_Oxley_Act_of_2002.pdf
November 20th, 2009 at 11:43 am
The Sarbanes-Oxley Act (SOX) was triggered by the bankruptcies and alleged audit failures involving such companies as Enron and WorldCom.
Before SOX, the Auditing Standards Board (ASB) of the AICPA established auditing standards for private and public companies. The PCAOB, which is appointed and overseen by the SEC, now has responsibility for auditing standards for public companies. The ASB continues to oversee private companies.
An issue that SOX addresses is additional regulation for public companies and their auditors. Auditors are required to attest to management reports on the effectiveness of internal control over financial reporting under Section 404. The Act particularly addressed and changed the relationship between publicly help companies and their audit firms.
Auditor independence was another key issue of the Act.
The titles of the Act are:
TITLE I. PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD
TITLE II—AUDITOR INDEPENDENCE
TITLE III—CORPORATE RESPONSIBILITY
TITLE IV—ENHANCED FINANCIAL DISCLOSURES
TITLE V—ANALYST CONFLICTS OF INTEREST
TITLE VI—COMMISSION RESOURCES AND AUTHORITY
TITLE VII—STUDIES AND REPORTS
TITLE VIII—CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY
TITLE IX—WHITE-COLLAR CRIME PENALTY ENHANCEMENTS
TITLE X—CORPORATE TAX RETURNS
TITLE XI—CORPORATE FRAUD AND ACCOUNTABILITY
Here is a link to the legislation
http://www.pcaobus.org/About_the_PCAOB/Sarbanes_Oxley_Act_of_2002.pdf
References :
B.S. in Accounting