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Sarbanes-Oxley Act
The objective of this study is to read the guide to the Sarbanes-Oxley Act and to: (1) Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors make one suggestion for improvement; (2) Given the oversight of the accounting profession by the PCAOB as a result of the Sarbanes-Oxley Act, assess the impact on auditing firms and the public accounting professions; (3) state an opinion as to whether the writer of this work believes that the accounting profession is better off being self or government regulated with regard to a firm's ability to detect and report corporate fraud. Support for your position; and finally to (4) Predict whether or not corporate fraud will be reduced, increase, or remain the same based on requirements for audits of publicly traded companies as prescribed in the Sarbanes-Oxley Act. Stated in Section 304 are the following requirements: (1) Signing officer review; (2) does not contain any "material untrue statements or material omission or be considered misleading; (3) Signing officers are responsible for internal controls and internal controls have been evaluated within the last ninety days and findings reported; (3) deficiencies in internal controls are listed and fraud information involving employees with internal activities; and (4) any changes in internal control of a significant nature or anything that could negatively impact internal controls reported. (Sox-Law, 2003, p.1) In addition, it is illegal for organizations to reincorporate activities or transfer activities outside of the U.S. To avoid requirements.
Overview of the Sarbanes-Oxley Act
The legislation to the Sarbanes-Oxley Act came into being in 2002 and is reported to have introduced "major changes to the regulation of financial practice and corporate governance." (Sarbanes-Oxley Act, 2002, p.1) The Act was named after Senator Paul Sarbanes and Representative Mike Oxley who designed the legislation and set compliance deadlines for the Act. There are eleven titles included in the Sarbanes-Oxley Act. The Sarbanes-Oxley Act additionally established the public accounting board.
II. Sarbanes-Oxley Compliance
Section 401
Section 401 of the Sarbanes-Oxley Act sets out requirements that financial statements that are published by issuers be required to not only be accurate in nature but also to be presented "…in a manner that does not contain incorrect statements or admit to state material information." (Sox-Law, 2003, p.1) Requirements are stated for inclusion of: (1) all material off-balance sheet liabilities, and (2) obligations or transactions. (Sox-Law, 2003, p.1) In addition, the Commission is required to make the determination of whether "generally accepted accounting principles or…
Works Cited
Sarbanes-Oxley Act (2003) Soxlaw Website. Retrieved from: http://www.soxlaw.com/introduction.htm
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