Sarbanes Oxley Act

Topics: Internal control, Audit, Auditing, Enron / Pages: 2 (550 words) / Published: Mar 12th, 2015
Kevin Ong
Research 1. In the article “Is the Sarbanes-Oxley Act Working?” the author Stephen D. Willits and Curtis Nicholls talks about the Sarbanes-Oxley Act of 2002 that helps protect firms from fraud after Enron and other accounting scandals. The article touches on the objectives of SOX, the criticisms of SOX companies had after the law was passed, the impact it has on firms and auditors, the detriments of the SOX , the evidence, analysis, and the further study of the act. The author of the article conduct its own analysis: if fraud companies decrease, reduced media coverage should be observed. The author survey two newspaper from time periods at 1997-2012 using keywords and found that after 2005 , reports from media about fraud had decline and 2007 , reports of audit fraud releases decline as well. However, the author suggest that it could also be a shift in focus by the SEC or media such as focusing on banking issues during 2007. The article review SOX act as its goal is to: Enhance auditor independence by restricting non audit services, Working with the PCAOB to regulate profession and standards and to improve the elimination of fraud from financial reporting’s. The scope of the article describes that some refer to SOX as one of the toughest act because the cost of complying with SOX section 404, dealing with internal controls, cost many companies on average million to billions of dollars each year. The article also states that in 2010, The Dodd-Frank Wall Street reform and consumer protection act of 2010, changed SOX by exempting all public companies classified with less than 75 million assets from complying with SOX 404. The article touches on the impact of small companies going private to avoid SOX requirements and test was conducted that shows SOX was costly for smaller and less liquid firms. The impact on auditors however, has shown that auditor fees had risen and many of the extra work bought by SOX had allowed auditors to meet unprofitable or

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