Sarbanes-Oxley Act Acc 403- Auditing
SARBANES-OXLEY ACT
ACC 403- AUDITING
PROFESSOR
August 19, 2012
The Sarbanes-Oxley Act was placed into effect July 2002; the act introduced major changes to the regulation of corporate governance and financial practice. The Sarbanes-Oxley Act was named after Senator Paul Sarbanes and Representative Michael Oxley, who were the main architects that set a number of non-negotiable deadlines for compliance. The organization for Economic Cooperation and Development was one of the first non- government organizations to spell out the principles that should govern the corporate and issued the OECD Principles of Corporate Governance. The Sarbanes Oxley Act also known as Public Company Accounting Reform and Information Protection Act and Corporate and Auditing Accountability and Responsibility Act. It is a federal law that set various principles for all the U.S. companies to detect and evade fraud. It detects the scandals in the securities markets when the share prices of securities are affected. The act requires the Securities and Exchange Commission to implement rulings on requirements to comply with the law. It created a new agency called Public Company Accounting Oversight Board which regulates, oversees and inspects the role of auditors of public companies. The act covers auditor’s independence, corporate governance, internal control assessment and financial disclosures. The Sarbanes–Oxley contains 11 titles that describe specific mandates and requirements for financial reporting. Each title consists of several sections, which are the following below: I. Public Company Accounting Oversight Board (PCAOB): provides independent oversight of public accounting firms providing audit services and creates a central oversight board tasked with registering auditors. II. Auditors Independence: establishes standards for external auditor independence to limit conflicts of interest and states new auditor approval requirements, audit partner rotation, and auditor
ACC 403- AUDITING
PROFESSOR
August 19, 2012
The Sarbanes-Oxley Act was placed into effect July 2002; the act introduced major changes to the regulation of corporate governance and financial practice. The Sarbanes-Oxley Act was named after Senator Paul Sarbanes and Representative Michael Oxley, who were the main architects that set a number of non-negotiable deadlines for compliance. The organization for Economic Cooperation and Development was one of the first non- government organizations to spell out the principles that should govern the corporate and issued the OECD Principles of Corporate Governance. The Sarbanes Oxley Act also known as Public Company Accounting Reform and Information Protection Act and Corporate and Auditing Accountability and Responsibility Act. It is a federal law that set various principles for all the U.S. companies to detect and evade fraud. It detects the scandals in the securities markets when the share prices of securities are affected. The act requires the Securities and Exchange Commission to implement rulings on requirements to comply with the law. It created a new agency called Public Company Accounting Oversight Board which regulates, oversees and inspects the role of auditors of public companies. The act covers auditor’s independence, corporate governance, internal control assessment and financial disclosures. The Sarbanes–Oxley contains 11 titles that describe specific mandates and requirements for financial reporting. Each title consists of several sections, which are the following below: I. Public Company Accounting Oversight Board (PCAOB): provides independent oversight of public accounting firms providing audit services and creates a central oversight board tasked with registering auditors. II. Auditors Independence: establishes standards for external auditor independence to limit conflicts of interest and states new auditor approval requirements, audit partner rotation, and auditor