August 4, 2012
The Sarbanes-Oxley Act of 2002 was approved in order to keep corporations form scamming the government. The law was a consequence of many corporate scams. This law was to protect the investors and give them the correct information and to make the corporations reveal all information which may impact an investor’s judgment of the corporation. This act/law will make corporations complete an internal audit from time to time as to keep all the information correct and up to the standards of the laws. There are five pertinent compliance sections of the eleven sections within the Sarbanes-Oxley Act. The five compliance sections, according to “A Guide To The Sarbanes-Oxley Act” (2006), “Sarbanes Oxley Section 302, Sarbanes Oxley Section 401, Sarbanes Oxley Section 404, Sarbanes Oxley Section 409, and Sarbanes Oxley Section 802”. These sections are intended to assist and guide corporations in the correct direction. The sections are to help ensure a successful audit and management. These specific sections affect the role of the audit firms, sellers, and buyers, (Jelinek & Jelinek, 20010). All auditors internal and external must know all of the sections of the Sarbanes-Oxley Act. The Sarbanes-Oxley Act compulsory for corporations to reveal their off balance sheets for review to auditors as opposed earlier when these may have been left off the balance sheets. They should follow GAAP rules correctly. Furthermore, the SOX law also needs management to organize an internal control statement with each and every fiscal statement. This will make sure that not just the fiscal reports are organized correctly but sufficient safeguards are in place for the security of fiscal data. To some extent, the SOX Act has enhanced investors trust in the parameters of fiscal reporting. Moving forward, Section 409 (material event revealing) needs all publicly traded organizations to reveal all information related to material modifications in their...
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