New User? Start here.
Error goes here
Please upload all relevant files for quick & complete assistance.
The entire report can be created to represent the audit issues which had occurred in the US for conducting an act. The act is named as Sarbanes-Oxley Act. An audit opinion mainly indicates the adequate primary controls as well as the financial statements of the entire company. It indicates about the complete, accurate with the applicable accounting standers. The first portion of the report shows the major issues occurred for the act. After that, the report shows the current accounting standers related to audit and briefly discussed all the objectives and opinion related to the standers. The report also depicts the entire relationship between auditor and client on the Auditor-Client Relationship portal. Lastly, it shows the significant impact of the act which needed to develop the corporate governance role of US.
The Sarbanes-Oxley Act was established in the month of July, 2002 and introduced a huge change in the area of the business governance as well as the financial practice. It is crucially introduced after Senator Paul Sarbanes with a Representative named Michael Oxley where it set some fixed deadlines for fulfillment. The main expectation of SOX is to be the cure because of the unexpected sickness which affected the corporate part of America. It mainly came along with a huge change in the field of auditing.
The term Auditing can be described in two ways.
Accounting: Systematic verification and examination of a company's book of the transaction record, account, physical inspection of inventory by a qualified accountant and other relevant documents.
Quality control: Episodic onsite authentication to determine whether or not a recognized quality system is being efficiently implemented. Here the assignment is about auditing, and we are here to discuss the field of auditing after Sarbanes-Oxley Act in 2002. This mirror part of the act is "Public Company Accounting Reform and Investor Protection Act." There are also more than one acts that also apply to privately held companies. As a result of SOX, the top management has the responsibilities to certify the exact financial information. If there is any mistake or duplicity in the financial activities, penalties will take place, in spite of this SOX also have increased the over side role of the board of directors, and the auditors who come to do work will get the independence they want. The changes are made by the act in the relationship between the Auditor and the client. There are some cost benefits of this act; they are Compliance costs, benefits to firm and investors, etc.
An auditing part of a company contains several types of the auditor. Internal auditors are the primary part of the verification section. Also, there have two types of auditors. Those are Government auditors as well as Independent auditors. All employee performance can be reviewed by Internal auditors. The internal auditors always observe the company regulations and the financial system of the company (A handbook for measuring employee performance 2001). They allow leaders of the company to be informed about everything happening in the company and to address any issues or concerns with the company early. But according to one of the recently released reports in the Internal auditors institute, most of them are lack of adequate flexibility to meet the business challenges and any unexpected risks in the business. There are different kinds of issues which confront the internal auditors (Radcliffe 2008). The annual risk assessments become inadequate due to rapidly emerging risks must be understood by the chief audit executives (CAEs). They should revise audit plans and inform stakeholders about the changes. The auditors should focus on the areas of the particular organization which is likely to be affected. Traditional, routine risks can be easily identified and are readily assessed but the emerging risks which are not identified before this month or year are one of the hardest risks to be identified and assessed by the auditors. The majority of CAEs said that they update their audit plan once a year or twice a year, but 16 percent of them only believe that this plan audit process is flexible enough to respond to any risks emerging immediately. The internal audit must have a broad view of risks. To identify the document and manage the internal control significantly, a management can be required by the auditor. (Hightower 2009). Thus the auditors must be genuine to management's appraisal of any internal controls entities. This process for assessing the efficiency of controls is not advised by the auditors to begin as early as possible. The field of auditing is highly influenced by this act in the market of US. There are six main areas where the act is most effective since 2002.
The standards and rules for the audit reports are set on this board. A rule is there that all the companies, accounting firms which must be registered by oversight board.
Auditors now contains a register about non audit service. They will not be able to perform at the time of the audit. The act also says that a firm audit employee must wait one year to become a former client's executive (Damane 2001). Before completed any audit service, it is primary duty for a former firm to wait for one year ti hire new employer.
Better Financial Disclosure
Transaction as well as relationship which mainly happen to be the off balance sheet which can affect the financial status big time must be closed somehow (Laibstain 1988). Personal loans of corporations to related executive is now strongly restricted. In the annual report, It is cleared that the management is responsible for everything.
Internet disclosures variance
The interest disclosure can conflict the research analysts who mainly make the offer research reports (LeUSemia Research Reports: Guide for authors 2012). The analyst has to report whether he/she has received any corporate compensation and give securities for the company or not.
Company Fraud Accountability
Destroying, falsifying, altering the reports or document with the intentional influence of a federal investigation case is subjective to fined for maximum 20 years of incarceration and the fresh audit papers must be keep on hold for five years (Audit work program 2002-2003 2002).
The responsibility of the attorney
The professional standard which conduct because of the attorneys representing unrestricted companies earlier than SEC. Security must have a communication between him/her and the CEO of the company.
The act is very complicated and confusing also. If one don't follow the rules, ROX can get penalties for the work.
The written statements which consist of rules and regulations issued by the accounting institutions for uniform and consistent financial statements are known as the accounting standards (Oppermann 2001). It contains the terms and conditions of the accounting policies and the practices by the way of codes, adjustments, and guidelines for the interpretation of the items which appear in the financial statements. That makes it easy for their treatment in the books of account. There are various natures of accounting standards. It serves as a guide to the accountants in the accounting process. It also acts like a dictator in the field of accounting. It acts like a dictator because in some areas the accountants have no choice but to opt for those which are stated in the accounting standards. It also acts as a service provider as it helps in comprising the scope of accounting by certain terms and conditions. The accounting standards are not and it also brings uniformity in accounting methods. Thus it acts as a harmonizer (Blumberg 2014). To specific accounting issues, the accounting standards provide and develop solutions on many occasions. The primary emphasis of accounting standards lies on providing accounting information by the process of decision making. There are many purposes for which the accounting standards are needed. Thus there are many objectives of accounting standards. The different objectives of accounting standards are as follows –
The attention of current Congressional, controlling and fiscal statements has been on the matter of earnings superiority besides the quality statements and user discussions. So, that affects the auditor-client relationship as that built as the planned limits on the nation that general auditor occupancy fallouts in auditor satisfaction(McCoy 2010). The Sarbanes-Oxley Act of 2002 would not execute the compulsory revolution of review organizations(Sarbanes-Oxley Act of 2002-2003). Inside one year of the passing of the act, it commands a learning of compulsory revolution by the Comptroller General of the UK to be accomplished.
In an effort to discourse some questions elaborated in variable markets, the Sarbanes-Oxley Act was granted by U.S. Congress as well as it was signed by the President during the summer of 2002(Capital Markets Law Journal - Editorial Board 2015). Among the targeted matters, unique of the significant addressed was the question of auditor's individuality of the clients they inspect.
Auditor freedom has frequently been inspected over the previous year everywhere. The nations differ customarily in their different angle of views that auditor's role has been specified, though. Individuality has come in front always nearly common to be between the most important features an accountant can own and one that donates expressively to the dependability of economic information(Financial information 2009).
The Sarbanes-Oxley Act helps to solve some of the problemsto auditor individuality under the ISB's intangible agenda (ISB 2001) more efficiently than others. It protects the bondholders and the clients as universal communal from bookkeeping threats and fake practices in the markets. It also increases the accuracy of corporate disclosures(Hollington 2007).
This title means that it contains nine units and establishments of the Public Company Accounting Oversight Board. It has been created to provide independent oversight of the auditor.
This term involves of nine segments and creates standards for that auditor individuality that are taken externally to limit conflicts of interest(Blay and Geiger 2012). It also provides the new auditor sanction necessities and audit companion revolution, and it also contains the auditor journalism necessities. It doesn't accept inspecting firms from providing non-audit facilities to the similar clients.
This label three comprises of eight segments and mandates that the maximum liability of the accuracy and the completeness of corporate financial reports should be taken by the senior executives(Datta, Iskandar-Datta and Singh 2014).
This term involves of nine units and defines advanced broadcasting necessities for financial connections, counting preformed figures, off-balance-sheet connections and stock communications of commercial officers(Monthly report on financial transactions 2010).
This term includes unique segment. It consists of the definition of the code of conduct for securities analyst.
This title includes four segments. It gives the definition of the performs to restore depositor self-assurance in safeties predictors(Trautmann and Hamilton 2001). It also describes circumstances underneath that an individual can't be accepted committed as a negotiator, advisor or dealer.
This term includes five units. It consists of the belongings of merging of public bookkeeping organizations.
This title includes six sections. It also called the "White Collar Crime Penalty Enhancement 2002." This section also improves the criminal penalties and conspiracies.
This title includes only one section, and the company tax return should be signed by the Chief Executive Officer(Basak and Clayman 2005).
This term includes six units. It is also referred to as the "White Collar Crime Penalty Enhancement Act 2002." It gives a stronger sentencing guidance.
This term includes seven sections. It is also referred to as the "Corporate Fraud Accountability Act of 2002." This section is used to identify the criminal offenses and specifies the penalties under the section 1101.
Auditors do the potential measures by over viewing the following points, which includes:
The SOX Act allows various consulting services for the clients and huge auditor independence.
Business scandals became a major drawback among big public companies between 2000 to 2002. The Sarbanes-Oxley Act was created in July of 2002 for restoring the confidence of market investors and also closed all the loopholes with the open companies to defraud the investors. Also, the act may contain some profound effects which can create an effective impact on the corporate governance of United States. All the popular public companies were required by the Sarbanes-Oxley Act for straightening the audit committees (Braiotta 2004). Also, the act requires for performing a test of internal control as well as for observing the personality of directors. In a financial statement, the act set the personal liability of directors as well as strengthen disclosure. Also, stricter criminal penalties can be established by Sarbanes-Oxley Act to secure public from frauds as well as trained public for operating their business efficiently.
One of the practical impact of Sarbanes-Oxley Act in US for straitening audit committees among open or public companies. A wide leverage can be received by the audit committees for taking a decision on overseeing the company's top management. On the primary management division of a company, it is crucial to give full independence to all committee members. The committee members also gain current responsibilities. Some of the responsibilities are-
The division 404 of Sarbanes-Oxley Act contain the costliest part. Public companies are required by that part for performing the test of extensive internal control. It also includes the report on their yearly audit. In the financial reporting, it requires enormous effort as well as external accountants involvement for testing and collecting manual and automatic control. It is also available for IT personnel. The companies which have heavily rely on their manual controls, they faced some burdensome on their compliance cost. To make tough financial position, all companies can be influenced by Sarbanes-Oxley Act (`Financial Position... Strong' 2006). The act also makes the companies more efficient as well as centralized.
In financial reporting, Sarbanes-Oxley Act can change the responsibility of entire management. The act mainly required the personal certification of quality managers to finalize their accuracy reports. The top managers may be facing 10 to 20 years in prison for making of false or wrong certification intentionally. If there have occurred any critical situation for a company of US to require accounting restatement due to the misconduct of management, then the top level managers can be forced to give up their profits and bonus as well as allowance. If any director as well as the manager can trap for securities law violation, then he/she can be restricted to lead their job. He can be restricted to do the same job also on different companies.
The entire disclosure requirement can be straitened by The Sarbanes-Oxley Act significantly. Any off-balance sheet material can be disclosed for a required arrangement which is required by the public companies (Audits of public companies 2008). Some of the arrangements can be followed-
Also, there have a pro forma statements which can also be required to disclosed by the US company. It can be disclosed to determine the accepted accounting principles (GAAP). All the stock transactions can be reported by the insiders for Securities and Exchange Commission (SEC), which contains maximum two corporate days as well.
Punishment, which is named as harsher punishment can be imposed by The Sarbanes-Oxley Act to obstruct the justice as well as to identify and observe the securities fraud. It also obstructs another fraud like-
The judgment for the securities fraud can be incensed for 25 years maximum. The prison time for the securities fraud can be increased for 20 years maximum. In the case of mail fraud as well as wire fraud, the perfect punishment can be increased for five years to 20 years in the prison time. The Sarbanes-Oxley Act can also take the fine from public comities for the same offense, and the fine will be increased by depending on the situation.
The corporate governance of US public companies can be affected by Sarbanes-Oxley Act, and also the belongings of the act can be reflected the external auditors. The Public Company Accounting Oversight Board can be established by the act. The board broadcasts the governance standard for the public accountants on the US based companies (BEDARD 2012). Also, the board can be introduced by the act to restrict their conflict of interest. It requires the main audit partner, whose position can be shifted by each five years on the similar public company.
There are more than one that comes in the mind while writing the conclusion about SOX and auditing altogether. SOX and auditing are interrelated with each other. One makes changes, and the other one changes itself due to the changefulness of the first one. Here it means that the acts SOX has put a huge impact in the market of accounting which directly or indirectly has changed the auditing market. Especially the US market has been brought a huge change in the field of accounting. The primary ratification of Sarbanes-Oxley Act is not only to identify the main problem context of current situation for US banking as well as finance industry.
After the Act had taken place, the government had introduced some key provisions for,
`Financial Position... Strong'. (2006). PN, 41(16), pp.12-12.
A handbook for measuring employee performance. (2001). [Washington, D.C.]: U.S. Office of Personnel Management, Performance Management and Incentive Awards Division.
Audit work program 2002-2003. (2002). Canberra: Australian National Audit Office.
Audits of public companies. (2008). [Washington, D.C.]: U.S. Govt. Accountability Office.
Basak, I. and Clayman, M. (2005). Tax Rates and Stock Returns. Investing, 14(4), pp.35-46.
BEDARD, J. (2012). Discussion of “Audit Partner Specialization and Audit Fees: Some Evidence from Sweden”*. Contemporary Accounting Research, 29(1), pp.341-348.
Blay, A. and Geiger, M. (2012). Auditor Fees and Auditor Independence: Evidence from Going Concern Reporting Decisions*. Contemporary Accounting Research, 30(2), pp.579-606.
Blumberg, D. (2014). Harmonizer. North Charleston, S.C.: CreateSpace Independent Pub. Platform.
Bragg, S. and Bragg, S. (2007). Accounting policies and procedures manual. Hoboken, N.J.: Wiley.
Braiotta, L. (2004). The audit committee handbook. New York: Wiley.
Capital Markets Law Journal - Editorial Board. (2015). Capital Markets Law Journal, 10(2), pp.i2-i2.
Damane, M. (2001). Executive Commentary. Academy of Management Executive, 15(3), pp.34-34.
Datta, S., Iskandar-Datta, M. and Singh, V. (2014). Opaque financial reports and R2: Revisited. Review of Financial Economics, 23(1), pp.10-17.
Financial information. (2009). [Vancouver]: BC Renal Agency.
Hightower, R. (2009). Internal controls policies and procedures. Hoboken, N.J.: Wiley.
Hollington, R. (2007). Shareholders' rights. London: Sweet & Maxwell.
Laibstain, S. (1988). Financial statement disclosures. New York, NY: American Institute of Certified Public Accountants.
LeUSemia Research Reports: Guide for authors. (2012). LeUSemia Research Reports, 1(1), pp.A2-A5.
McCoy, N. (2010). The effects of auditor-client relationships, auditor-auditor relationships, and persuasive communication on auditor's objectivity.
Monthly report on financial transactions. (2010). [QueÌbec]: Finances QueÌbec.
Oppermann, H. (2001). Accounting standards. Lansdowne [South Africa]: Juta.
Radcliffe, V. (2008). Public secrecy in auditing: What government auditors cannot know. Critical Perspectives on Accounting, 19(1), pp.99-126.
Sarbanes-Oxley Act of 2002. (2003). [Place of publication not identified]: Financial Executives Research Foundation.
Trautmann, T. and Hamilton, J. (2001). Informal corporate disclosure under federal securities law. Chicago, IL: CCH Inc.
Walsh, A. (2001). Are Market Norms and Intrinsic Valuation Mutually Exclusive?. Australasian Journal of Philosophy, 79(4), pp.525-543.
To View this & another 50000+ free samples. Please put
your valid email id.
Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.
Get Moneyinto Your Wallet
Total 15 pages
*The content must not be available online or in our existing Database to qualify as
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2017). Impact Of Sarbanes Oxley. Retrieved from https://myassignmenthelp.com/free-samples/impact-of-sarbanes-oxley.
"Impact Of Sarbanes Oxley." My Assignment Help, 2017, https://myassignmenthelp.com/free-samples/impact-of-sarbanes-oxley.
My Assignment Help (2017) Impact Of Sarbanes Oxley [Online]. Available from: https://myassignmenthelp.com/free-samples/impact-of-sarbanes-oxley[Accessed 25 May 2022].
My Assignment Help. 'Impact Of Sarbanes Oxley' (My Assignment Help, 2017) <https://myassignmenthelp.com/free-samples/impact-of-sarbanes-oxley> accessed 25 May 2022.
My Assignment Help. Impact Of Sarbanes Oxley [Internet]. My Assignment Help. 2017 [cited 25 May 2022]. Available from: https://myassignmenthelp.com/free-samples/impact-of-sarbanes-oxley.
The respective sample has been mail to your register email id
* $5 to be used on order value more than $50. Valid for
We have sent login details on your registered email.
MyAssignmenthelp.com is one of the noted service providers that deliver essay help. We provide tailored essay assistance to make sure that student gets online essay help exactly in the way they want it to be written. We at MyAssigemnthelp.com have built teams of consultants, who readily attend every query related to help me writing my essay. We provide essay writing help in forms of tips and steps in order o assist students with tough essay assignments.
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Present study is based on evaluation of various aspects of audit by considering its significance in present commercial era. Study is bifurcated in three questions which deals with pressure on auditor, changing role and responsibilities of auditor and opinion provided by them on the basis of analysis respectively.
Pressure is the part of the life of any auditor whether it be professionally or academically. Pressure c...
In the year 2008 Australia face tremendous economic crises. In which a major company of day care of children collapsed. A child care and old and disable training center was introduced by a company name ABC Learning Center. It was not one of its kinds but still rose with a tremendous speed. The speed was so much that even the management could not control the success of the company. Within five years of working the ABC Lear...
As the firm Mortdale Accounting is under peer review process, it shall not disclose the details or any information to any person outside the organization. Confidentiality is to be maintained by every person who is involved in peer review process including the peer review team, the members of the Board, the audit team of the firm, assistants or any other person who was involved in the audit process (Cappelleto, 2010). Hence, the ...
1. Independence of Auditors:
While conducting the audit, the auditors need to act in accordance to the generally accepted auditing standards. Such standards must ensure that auditors need to conduct audit technique with care along with mind’s objective status. Independence term is a conceptual aspect and is quite complex to define (Abbott and Lawrence, 2015). Additionally, auditor needs to maintain objectivity, integrity along ...
The overall report is based upon the assessment of the bank namely National Australian Bank (NAB) that assess the every aspect of the organization at several criteria’s like nature of the entity, industry regulations and external factors that influence the organization. Similarly, it also assesses the business risks and strategies arise in the operations. Furthermore, it also explains the performance measures and mo...
Get top notch assistance from our best tutors ! Excel in your academics & career in one easy click!
ACC707 Auditing And Assurance
ACC300 Auditing And Assurance Services
HA3032 Auditing And Assurance Services
HI6026 Audit Assurance And Compliance
HI6026 Audit, Assurance And Compliance
ACCG305 Auditing And Assurance Services
Just refer 5 friends to earn more than $2000.
If you are the original writer of this content and no longer wish to have your work published on Myassignmenthelp.com then please raise the
content removal request.
After the successfull payment you will be redirected to the detail page where you can see download full answer button over blur text.You can also download from there.
Or you can also download from My Library section once you login.Click on the My Library icon
My Library page open there you can see all your purchased sample and you can download from there.
That's our welcome gift for first time visitors
On APP - grab it while it lasts!
*Offer eligible for first 3 orders ordered through app!
ONLINE TO HELP YOU 24X7
OR GET MONEY BACK!
OUT OF 38983 REVIEWS
Received my assignment before my deadline request, paper was well written. Highly