Advanced Audit _ Assurance.pptx
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This document discusses new regulations and pronouncements affecting auditing. It covers the Sarbanes-Oxley Act, the Public Company Accounting Oversight Board, and five key things to know about new auditor reporting standards, including specifying the order of reporting and highlighting going concern issues. The document also addresses implications of voluntary disclosure programs for customs audits and how blockchain could improve audit quality and efficiency while providing opportunities for auditors. It concludes by thanking the reader.
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1Emerging Auditing IssuesByWeek .docx
1
Emerging Auditing Issues
By
Week 8 Assignment 4
ACC 571 Emerging Auditing Technologies
Instructor
Dr.
University
February 27, 2016
ABSTRACT
Following the numerous pre-2002 accounting scandals that bedeviled corporate America, the U.S. Congress passed the Sarbanes-Oxley Law of 2002 (SOX,2002), to prevent and deter future accounting fraud, protect investors and increase confidence in public company financial accounting reporting and ensure confidence in the US stock markets. SOX created the Public Company Accounting Oversight Board (PCAOB) charged with overseeing public company audits, setting audit standards, and investigating acts of noncompliance by auditors or audit firms. The PCAOB which is set up by the Securities and Exchange Commission under SOX, 2002 has the following responsibilities: registration of public accounting firms that audit publicly traded companies, establishing or adopting auditing, quality control, ethics, independence, and other standards relating to audits of publicly traded companies, inspecting public accounting firms, investigating registered public accounting firms and their employees, conducting disciplinary hearings, and imposing sanctions were justified, performing such other duties as necessary to promote high professional standards among registered accounting firms, and enforcing compliance with the SOX Act, 2002, the rules of the Board, professional standards, and securities laws relating to public company audits.( Kranacher, et, al 2010).
In this document attempt is made to evaluate the impact of PCAOB, herein after called the Board, in improving the reliability of audited financial statement of public companies, and assess the impact of the Board’s regulatory role on the accounting profession. The document further evaluates whether or not the Board should issue additional regulations regarding the responsibilities for corporate officers and auditors of financial statements and their impact on financial statement integrity. It looks at the impact of SOX regulation on internal control environment and speculates on the level of testing necessary to provide assurance of completeness and accuracy for CEOs to certify the company’s financial statements. The document assesses how the System Design Life Cycle model would impact the emerging issues, recommend a strategy for dealing with the emerging issues and determine the types of fraud schemes that might go undetected if these recommendations are not implemented.
Has PCAOB been effective with improving the reliability of audited financial statement for the public users of the information?
The establishment of the Public Company Accounting Oversight Board (PCAOB) in line with SOX as an independent oversight body of public company audits has ended more than 100 years of self-regulation and improved the quality and integrity of financial reporting. By shifting responsibility for external auditor relationship from.
Audit paper----Lu Han
The document discusses the creation of the PCAOB by the Sarbanes-Oxley Act of 2002 in response to several major accounting scandals in 2001-2002 that undermined public confidence in auditors. It analyzes the impact of the PCAOB on improving auditing standards and decreasing accounting deficiencies and fraud compared to the previous self-regulatory approach of the AICPA. The PCAOB adopted auditing standards, registered accounting firms, inspected audit reports, and enforced compliance through potential sanctions. Studies cited found the PCAOB reduced non-misstatements and revenue-related deficiencies in large, mid-sized, and small accounting firms. The PCAOB is argued to have been a necessary reform as an external regulator, unlike the
Cost benefits of sox compliance
The purpose of this paper to highlight key rules introduced in Sarbanes - Oxley Act of 2002 and cost/benefits of compliance process.
The Sarbanes-Oxley Act at 15 (EY Publication)
The Sarbanes-Oxley Act of 2002 (SOX) established the Public Company Accounting Oversight Board (PCAOB) to oversee audits of public companies and improve accountability in financial reporting. SOX also strengthened corporate governance and financial disclosure. The PCAOB registers audit firms, inspects audits for compliance, and sets auditing standards. SOX has improved audit quality and increased transparency and oversight of both companies and auditors. While some provisions like internal control reporting have faced criticism, SOX overall increased investor confidence in US financial markets.
Tip Of The Compliance Iceberg
Sarbanes-Oxley Section 404 requires companies to assess and report on the effectiveness of their internal controls. However, many companies have only addressed the requirements of Section 404 itself, which represents just the "tip of the compliance iceberg." To fully comply with the spirit of Sarbanes-Oxley, companies need to implement the integrated internal control framework as defined by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO framework addresses five components of internal control - control environment, risk assessment, control activities, information and communication, and monitoring - that encompass controls over financial reporting as well as operational and compliance areas. Properly addressing all elements of the COSO framework
Case 1 3 politicalization of accounting standards some accounta
The document discusses the increasing politicization of accounting standard setting. It provides examples of the Committee on Accounting Procedure (CAP), Accounting Principles Board (APB), and Financial Accounting Standards Board (FASB) to show how they have become more influenced by various interest groups over time. The CAP focused only on specific problems and lacked representation from interest groups. The APB aimed to address deficiencies of the CAP but also became problem-focused. The FASB now represents diverse stakeholders but still shows the evolutionary process towards greater politicization of standards.
Case 1-3 Politicalization of Accounting StandardsSome accounta
Case 1-3 Politicalization of Accounting Standards
Some accountants have said that politicalization in the development and
acceptance of generally accepted accounting principles (i.e., standard setting) is
taking place. Some use the term politicalization in a narrow sense to mean the
influence by governmental agencies, particularly the SEC, on the development of
generally accepted accounting principles. Others use it more broadly to mean the
compromising that takes place in bodies responsible for developing these principles
because of the influence and pressure of interested groups (SEC, American
Accounting Association, businesses through their various organizations, Institute
of Management Accountants, financial analysts, bankers, lawyers, etc.).
Required:
A.) Do the reasons these groups were formed, their methods of operation while in existence, and the reasons for the demise of the first two indicate an increasing politicalization (as the term is used in the broad sense) of accounting standard setting? Explain your answer by indicating how the CAP, APB, and FASB operated or operate. Cite specific developments that tend to support your answer.
CAP. The Committee on Accounting Procedure, CAP, which was in existence from 1939 to 1959, was a natural outgrowth of AICPA committees which were in existence during the period 1933 to 1938. The committee was formed in direct response to the criticism received by the accounting profession during the financial crisis of 1929 and the years thereafter. The authorization to issue pronouncements on matters of accounting principles and procedures was based on the belief that the AICPA had the responsibility to establish practices that would become generally accepted by the profession and by corporate management.
As a general rule, the CAP directed its attention, almost entirely, to resolving specific accounting problems and topics rather than to the development of generally accepted accounting principles. The committee voted on the acceptance of specific Accounting Research Bulletins published by the committee. A two-thirds majority was required to issue a particular research bulletin. The CAP did not have the authority to require acceptance of the issued bulletins by the general membership of the AICPA, but rather received its authority only upon general acceptance of the pronouncement by the members. That is, the bulletins set forth normative accounting procedures that "should be" followed by the accounting profession, but were not "required" to be followed.
It was not until well after the demise of the CAP, in 1964, that the Council of the AICPA adopted recommendations that departures from effective CAP Bulletins should be disclosed in financial statements or in audit reports of members of the AICPA. The demise of the CAP could probably be traced to four distinct factors: (1) the narrow nature of the subjects covered by the bulletins issued by the CAP, (2) the lack of any theoretical groundwork in esta ...
EY News and views - October 2015
This document summarizes recent developments in corporate governance, tax, financial reporting, and auditing from the perspective of EY. It discusses the OECD's recommendations on tackling base erosion and profit shifting, initiatives to increase transparency in the audit process in the US and EU, and growing interest in audit quality indicators. EY supports efforts to enhance corporate governance and transparency, while noting challenges around regulatory coordination and differing approaches between countries.
Recommended
1Emerging Auditing IssuesByWeek .docx
1
Emerging Auditing Issues
By
Week 8 Assignment 4
ACC 571 Emerging Auditing Technologies
Instructor
Dr.
University
February 27, 2016
ABSTRACT
Following the numerous pre-2002 accounting scandals that bedeviled corporate America, the U.S. Congress passed the Sarbanes-Oxley Law of 2002 (SOX,2002), to prevent and deter future accounting fraud, protect investors and increase confidence in public company financial accounting reporting and ensure confidence in the US stock markets. SOX created the Public Company Accounting Oversight Board (PCAOB) charged with overseeing public company audits, setting audit standards, and investigating acts of noncompliance by auditors or audit firms. The PCAOB which is set up by the Securities and Exchange Commission under SOX, 2002 has the following responsibilities: registration of public accounting firms that audit publicly traded companies, establishing or adopting auditing, quality control, ethics, independence, and other standards relating to audits of publicly traded companies, inspecting public accounting firms, investigating registered public accounting firms and their employees, conducting disciplinary hearings, and imposing sanctions were justified, performing such other duties as necessary to promote high professional standards among registered accounting firms, and enforcing compliance with the SOX Act, 2002, the rules of the Board, professional standards, and securities laws relating to public company audits.( Kranacher, et, al 2010).
In this document attempt is made to evaluate the impact of PCAOB, herein after called the Board, in improving the reliability of audited financial statement of public companies, and assess the impact of the Board’s regulatory role on the accounting profession. The document further evaluates whether or not the Board should issue additional regulations regarding the responsibilities for corporate officers and auditors of financial statements and their impact on financial statement integrity. It looks at the impact of SOX regulation on internal control environment and speculates on the level of testing necessary to provide assurance of completeness and accuracy for CEOs to certify the company’s financial statements. The document assesses how the System Design Life Cycle model would impact the emerging issues, recommend a strategy for dealing with the emerging issues and determine the types of fraud schemes that might go undetected if these recommendations are not implemented.
Has PCAOB been effective with improving the reliability of audited financial statement for the public users of the information?
The establishment of the Public Company Accounting Oversight Board (PCAOB) in line with SOX as an independent oversight body of public company audits has ended more than 100 years of self-regulation and improved the quality and integrity of financial reporting. By shifting responsibility for external auditor relationship from.
Audit paper----Lu Han
The document discusses the creation of the PCAOB by the Sarbanes-Oxley Act of 2002 in response to several major accounting scandals in 2001-2002 that undermined public confidence in auditors. It analyzes the impact of the PCAOB on improving auditing standards and decreasing accounting deficiencies and fraud compared to the previous self-regulatory approach of the AICPA. The PCAOB adopted auditing standards, registered accounting firms, inspected audit reports, and enforced compliance through potential sanctions. Studies cited found the PCAOB reduced non-misstatements and revenue-related deficiencies in large, mid-sized, and small accounting firms. The PCAOB is argued to have been a necessary reform as an external regulator, unlike the
Cost benefits of sox compliance
The purpose of this paper to highlight key rules introduced in Sarbanes - Oxley Act of 2002 and cost/benefits of compliance process.
The Sarbanes-Oxley Act at 15 (EY Publication)
The Sarbanes-Oxley Act of 2002 (SOX) established the Public Company Accounting Oversight Board (PCAOB) to oversee audits of public companies and improve accountability in financial reporting. SOX also strengthened corporate governance and financial disclosure. The PCAOB registers audit firms, inspects audits for compliance, and sets auditing standards. SOX has improved audit quality and increased transparency and oversight of both companies and auditors. While some provisions like internal control reporting have faced criticism, SOX overall increased investor confidence in US financial markets.
Tip Of The Compliance Iceberg
Sarbanes-Oxley Section 404 requires companies to assess and report on the effectiveness of their internal controls. However, many companies have only addressed the requirements of Section 404 itself, which represents just the "tip of the compliance iceberg." To fully comply with the spirit of Sarbanes-Oxley, companies need to implement the integrated internal control framework as defined by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO framework addresses five components of internal control - control environment, risk assessment, control activities, information and communication, and monitoring - that encompass controls over financial reporting as well as operational and compliance areas. Properly addressing all elements of the COSO framework
Case 1 3 politicalization of accounting standards some accounta
The document discusses the increasing politicization of accounting standard setting. It provides examples of the Committee on Accounting Procedure (CAP), Accounting Principles Board (APB), and Financial Accounting Standards Board (FASB) to show how they have become more influenced by various interest groups over time. The CAP focused only on specific problems and lacked representation from interest groups. The APB aimed to address deficiencies of the CAP but also became problem-focused. The FASB now represents diverse stakeholders but still shows the evolutionary process towards greater politicization of standards.
Case 1-3 Politicalization of Accounting StandardsSome accounta
Case 1-3 Politicalization of Accounting Standards
Some accountants have said that politicalization in the development and
acceptance of generally accepted accounting principles (i.e., standard setting) is
taking place. Some use the term politicalization in a narrow sense to mean the
influence by governmental agencies, particularly the SEC, on the development of
generally accepted accounting principles. Others use it more broadly to mean the
compromising that takes place in bodies responsible for developing these principles
because of the influence and pressure of interested groups (SEC, American
Accounting Association, businesses through their various organizations, Institute
of Management Accountants, financial analysts, bankers, lawyers, etc.).
Required:
A.) Do the reasons these groups were formed, their methods of operation while in existence, and the reasons for the demise of the first two indicate an increasing politicalization (as the term is used in the broad sense) of accounting standard setting? Explain your answer by indicating how the CAP, APB, and FASB operated or operate. Cite specific developments that tend to support your answer.
CAP. The Committee on Accounting Procedure, CAP, which was in existence from 1939 to 1959, was a natural outgrowth of AICPA committees which were in existence during the period 1933 to 1938. The committee was formed in direct response to the criticism received by the accounting profession during the financial crisis of 1929 and the years thereafter. The authorization to issue pronouncements on matters of accounting principles and procedures was based on the belief that the AICPA had the responsibility to establish practices that would become generally accepted by the profession and by corporate management.
As a general rule, the CAP directed its attention, almost entirely, to resolving specific accounting problems and topics rather than to the development of generally accepted accounting principles. The committee voted on the acceptance of specific Accounting Research Bulletins published by the committee. A two-thirds majority was required to issue a particular research bulletin. The CAP did not have the authority to require acceptance of the issued bulletins by the general membership of the AICPA, but rather received its authority only upon general acceptance of the pronouncement by the members. That is, the bulletins set forth normative accounting procedures that "should be" followed by the accounting profession, but were not "required" to be followed.
It was not until well after the demise of the CAP, in 1964, that the Council of the AICPA adopted recommendations that departures from effective CAP Bulletins should be disclosed in financial statements or in audit reports of members of the AICPA. The demise of the CAP could probably be traced to four distinct factors: (1) the narrow nature of the subjects covered by the bulletins issued by the CAP, (2) the lack of any theoretical groundwork in esta ...
EY News and views - October 2015
This document summarizes recent developments in corporate governance, tax, financial reporting, and auditing from the perspective of EY. It discusses the OECD's recommendations on tackling base erosion and profit shifting, initiatives to increase transparency in the audit process in the US and EU, and growing interest in audit quality indicators. EY supports efforts to enhance corporate governance and transparency, while noting challenges around regulatory coordination and differing approaches between countries.
Tip of the Compliance Iceberg
This document discusses corporate compliance with the Sarbanes-Oxley Act and achieving an effective internal control environment based on the COSO framework. It argues that while many companies have focused on complying with specific SOX sections like 404, true compliance requires addressing the full depth of the "compliance iceberg" as defined by COSO. This includes controls for operations, compliance with other regulations, and unique organizational processes. It also emphasizes that compliance requires adhering to the spirit of establishing effective controls, not just the letter of satisfying individual SOX sections. Monitoring and separate evaluation are key to ensuring controls are properly implemented and maintained throughout an organization.
Question 1 1. The American Institute of Certified Public Account.docx
Question 1
1. The American Institute of Certified Public Accountants (AICPA), the Public Company Accounting Oversight Board (PCAOB), and the International Auditing and Assurance Standards Board (IAASB) have a common goal to:
Verify that the financial statements are free from material errors.
Verify that the financial statements are free from all errors.
Provide financial information to disinterested third parties.
Provide assurance to the public that audits are conducted in a professional manner.
5 points
Question 2
1. How many countries rely on the standards issued by the International Auditing and Assurance Standards Board?
25
Over 100
Only the European countries.
The twelve countries in North America.
5 points
Question 3
1. Which phase of the audit formulation process contains management's assertions of rights and obligations for their manufacturing facilities?
Phase I
Phase II
Phase III
Phase V
5 points
Question 4
1. All of the following requirements became mandatory when Congress passed the Sarbanes-Oxley Act of 2002, except:
Companies are required to establish an independent audit committee.
Prohibition on consulting work that auditors can perform for their audit clients.
Mandatory rotation every five years of the partner in charge of the audit engagement.
Creation of the Committee of Sponsoring Organizations (COSO) to oversee companies who do business on the New York Stock exchange (NYSE).
5 points
Question 5
1. The following individual is responsible for overseeing the day-to-day activities on a specific audit:
Partner
Senior
Manager
Supervisor
5 points
Question 6
1. The second principle of performance developed by the AICPA requires the auditor to do all of the following during an audit except:
Obtain absolute assurance as to whether the financial statements are free from material misstatements.
Determine materiality levels.
Identify risks of material misstatement.
Implement appropriate audit responses to assessed risks.
5 points
Question 7
1. The board of directors' primary objective for the shareholders is to:
Compile financial statements for submission to the Securities and Exchange Commission (SEC)
Supervise the activities of the internal auditors.
Build long-term sustainable growth in shareholder value.
Evaluate potential external auditing companies to select for the annual audit.
5 points
Question 8
1. One of the most significant provisions of the Sarbanes/Oxley Act of 2002 was:
The mandatory requirement to compile financial statements in accordance with the standards provided by the Public Companies Accounting Oversight Board (PCAOB).
Establishment of the American Institute of Certified Public Accountants (AICPA) and their Code of Conduct.
Specifies the education and experience requirements for all members on the board of directors.
Requires the CEO and CFO to certify their company's financial statements.
5 points
Question 9
1. Which of the follow ...
An Examination of the Mechanism and Legal Regulation Assuring Audit Independence
Please cite to the respective author of this journal article: Chou, T.K. (2012). An Examination of the Mechanism and Legal Regulation Assuring Audit Independence. UC David Business Law Journal, 12: 225-242.
Sarbanes-Oxley Act of 2002-Tairreshel Hill
The Sarbanes-Oxley Act of 2002 was enacted in response to major corporate and accounting scandals to protect investors. Section 404 of the Act requires companies to assess the effectiveness of their internal controls over financial reporting and disclose any material weaknesses found. It is one of the most costly aspects of the Act for companies to implement. Section 404 requires management to produce an annual internal control report evaluating the company's controls and the auditor to attest to management's assessment.
SOX Compliance Checklist Steps for Implementation
Explore CIMCON Software's SOX compliance solutions to streamline audit and compliance processes. Ensure regulatory adherence and strengthen financial reporting with our comprehensive tools.
#SOXCompliance
The Sarbanes-Oxley , 2002 contains following provisions which determ.pdf
The Sarbanes-Oxley , 2002 contains following provisions which determines more adequacy of
control over financial statements.
One of the core elements of Sarbanes-Oxley was to clearly define and place responsibility for a
company’s financial statements with its cchief executive officer (CEO) and chief financial
officer (CFO), SOX mandated that these executives certify the following items (among others)
for each annual and quarterly report:
• They have reviewed the report
• Based on their knowledge, the financial information included in the report is fairly presented
• Based on their knowledge, the report does not contain any untrue statement of material fact or
omit a material fact that would make the financial statements misleading
• They acknowledge their responsibility for establishing and maintaining internal controls over
financial reporting and other disclosures
• They have evaluated the effectiveness of these controls, presented their conclusion as to
effectiveness and disclosed any material changes in the company’s controls.
SOX required companies to provide audit committees with the resources and authority to engage
independent counsel and advisers to help them carry out their duties. SOX also required audit
committees to establish procedures for receiving whistleblower complaints regarding accounting,
auditing and internal control irregularities and to provide for the confidential and anonymous
treatment of employee concerns regarding such matters. In addition, SOX enhanced the external
auditor’s required communications with the audit committee to include the following:
• A discussion of all critical accounting policies and practices used by the company
• All alternative accounting treatments that have been discussed with management, the
ramifications of the use of alternative disclosures and accounting treatments and the accounting
treatment preferred by the audit firm
• Other material written communications between the auditor and management.
Conclusion: I think the provisions of Sarbanes oxely Act are adequate, We should also focus on
the practicality of ever changing corporote world . A recent report showed that chances of
reinstatement of financial statements are 46% higher for the companies who do follow sarbanes-
oxley act.
See this provision of Sarbanes oxely act.
Officers and directors are prohibited from trading during pension “blackout” periods: The Act
prohibits corporate officers and directors from trading company securities during a pension fund
“blackout” period .
It was never there . It was aptly introduced by Sarbanes-oxely Act.
Solution
The Sarbanes-Oxley , 2002 contains following provisions which determines more adequacy of
control over financial statements.
One of the core elements of Sarbanes-Oxley was to clearly define and place responsibility for a
company’s financial statements with its cchief executive officer (CEO) and chief financial
officer (CFO), SOX mandated that these executives certify the following it.
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The document discusses internal financial controls (IFC) requirements under the Companies Act 2013. It summarizes that the new law requires boards and auditors of all companies to report on IFCs, whereas previously it was only for listed companies. It also notes the new law requires auditor opinion on both financial statements and IFC effectiveness, unlike past requirements. Additionally, it states the new law assigns directors specific responsibilities for establishing IFCs and commenting on their adequacy and effectiveness.
Session 3B Quality Assurance and Building Effective Oversight System - Bruce ...
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The document discusses the role and structure of the Public Company Accounting Oversight Board (PCAOB) as an independent regulator of auditors of public companies in the United States. It outlines the PCAOB's key functions of registration, standard-setting, inspections of audit firms, and investigations and enforcement actions. It also provides an overview of global developments in independent auditor oversight through regulatory bodies established in other countries and regions.Session 3B Quality Assurance and Building Effective Oversight System Bruce Ov...
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• Part of the collective knowledge of the Internal Audit profession
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• Essential elements for the effective delivery of Internal Audit
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The Sarbanes-Oxley Act (SOX) aims to improve accuracy and reliability of corporate disclosures. For telecom companies, SOX compliance can help address revenue leakages through initiatives to analyze sources of loss and strengthen internal controls. Telecom companies can leverage SOX to optimize processes, accelerate revenue assurance programs, and enhance transparency in financial reporting.
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The document provides an overview of the PCAOB reporting requirements for auditing firms. It discusses how the PCAOB aims to reduce financial fraud by requiring firms to submit annual and current reports on their audit practices and personnel. These reports collect information on the firm to confirm their independence and integrity. The document also outlines auditor responsibilities to detect fraud during audits and alternatives to the PCAOB such as strengthening the SEC.
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This document provides an agenda and presentation materials for a session on ensuring high quality financial reporting for state-owned enterprises (SOEs) in Indonesia. The agenda includes discussions on internal control and benchmarking for internal control over financial reporting, management review controls, and a question and answer session. The presentation materials cover regulations on internal control and ICOFR, ICOFR principles and their role in improving trust in financial reporting, the design and implementation of ICOFR using a top-down risk based approach, and examples of ICOFR practices in countries other than the US and Japan.
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This document provides an introduction to El Paso Corporation's Sarbanes-Oxley Section 404 compliance project. It outlines what employees will learn, including the purpose and requirements of SOX 404, what the project team has accomplished so far in documenting processes and controls, and the next steps of management's testing. It describes the roles of management in evaluating controls versus the external auditors in auditing the financial statements. Key parts of the project plan are summarized, including the timeline, organizational structure, and objectives of management's testing to validate that controls are operating effectively.
Sox In Telecom Industry
The document discusses the Sarbanes-Oxley Act and its implications for telecom companies. It requires executives to certify financial reports, establishes oversight of auditors, and aims to increase accuracy and reliability of corporate disclosures. For telecom companies, complying with SOX can help reduce revenue leakages, align data flows, and accelerate initiatives to plug leakage points.
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Tip of the Compliance Iceberg
This document discusses corporate compliance with the Sarbanes-Oxley Act and achieving an effective internal control environment based on the COSO framework. It argues that while many companies have focused on complying with specific SOX sections like 404, true compliance requires addressing the full depth of the "compliance iceberg" as defined by COSO. This includes controls for operations, compliance with other regulations, and unique organizational processes. It also emphasizes that compliance requires adhering to the spirit of establishing effective controls, not just the letter of satisfying individual SOX sections. Monitoring and separate evaluation are key to ensuring controls are properly implemented and maintained throughout an organization.
Question 1 1. The American Institute of Certified Public Account.docx
Question 1
1. The American Institute of Certified Public Accountants (AICPA), the Public Company Accounting Oversight Board (PCAOB), and the International Auditing and Assurance Standards Board (IAASB) have a common goal to:
Verify that the financial statements are free from material errors.
Verify that the financial statements are free from all errors.
Provide financial information to disinterested third parties.
Provide assurance to the public that audits are conducted in a professional manner.
5 points
Question 2
1. How many countries rely on the standards issued by the International Auditing and Assurance Standards Board?
25
Over 100
Only the European countries.
The twelve countries in North America.
5 points
Question 3
1. Which phase of the audit formulation process contains management's assertions of rights and obligations for their manufacturing facilities?
Phase I
Phase II
Phase III
Phase V
5 points
Question 4
1. All of the following requirements became mandatory when Congress passed the Sarbanes-Oxley Act of 2002, except:
Companies are required to establish an independent audit committee.
Prohibition on consulting work that auditors can perform for their audit clients.
Mandatory rotation every five years of the partner in charge of the audit engagement.
Creation of the Committee of Sponsoring Organizations (COSO) to oversee companies who do business on the New York Stock exchange (NYSE).
5 points
Question 5
1. The following individual is responsible for overseeing the day-to-day activities on a specific audit:
Partner
Senior
Manager
Supervisor
5 points
Question 6
1. The second principle of performance developed by the AICPA requires the auditor to do all of the following during an audit except:
Obtain absolute assurance as to whether the financial statements are free from material misstatements.
Determine materiality levels.
Identify risks of material misstatement.
Implement appropriate audit responses to assessed risks.
5 points
Question 7
1. The board of directors' primary objective for the shareholders is to:
Compile financial statements for submission to the Securities and Exchange Commission (SEC)
Supervise the activities of the internal auditors.
Build long-term sustainable growth in shareholder value.
Evaluate potential external auditing companies to select for the annual audit.
5 points
Question 8
1. One of the most significant provisions of the Sarbanes/Oxley Act of 2002 was:
The mandatory requirement to compile financial statements in accordance with the standards provided by the Public Companies Accounting Oversight Board (PCAOB).
Establishment of the American Institute of Certified Public Accountants (AICPA) and their Code of Conduct.
Specifies the education and experience requirements for all members on the board of directors.
Requires the CEO and CFO to certify their company's financial statements.
5 points
Question 9
1. Which of the follow ...
An Examination of the Mechanism and Legal Regulation Assuring Audit Independence
Please cite to the respective author of this journal article: Chou, T.K. (2012). An Examination of the Mechanism and Legal Regulation Assuring Audit Independence. UC David Business Law Journal, 12: 225-242.
Sarbanes-Oxley Act of 2002-Tairreshel Hill
The Sarbanes-Oxley Act of 2002 was enacted in response to major corporate and accounting scandals to protect investors. Section 404 of the Act requires companies to assess the effectiveness of their internal controls over financial reporting and disclose any material weaknesses found. It is one of the most costly aspects of the Act for companies to implement. Section 404 requires management to produce an annual internal control report evaluating the company's controls and the auditor to attest to management's assessment.
SOX Compliance Checklist Steps for Implementation
Explore CIMCON Software's SOX compliance solutions to streamline audit and compliance processes. Ensure regulatory adherence and strengthen financial reporting with our comprehensive tools.
#SOXCompliance
The Sarbanes-Oxley , 2002 contains following provisions which determ.pdf
The Sarbanes-Oxley , 2002 contains following provisions which determines more adequacy of
control over financial statements.
One of the core elements of Sarbanes-Oxley was to clearly define and place responsibility for a
company’s financial statements with its cchief executive officer (CEO) and chief financial
officer (CFO), SOX mandated that these executives certify the following items (among others)
for each annual and quarterly report:
• They have reviewed the report
• Based on their knowledge, the financial information included in the report is fairly presented
• Based on their knowledge, the report does not contain any untrue statement of material fact or
omit a material fact that would make the financial statements misleading
• They acknowledge their responsibility for establishing and maintaining internal controls over
financial reporting and other disclosures
• They have evaluated the effectiveness of these controls, presented their conclusion as to
effectiveness and disclosed any material changes in the company’s controls.
SOX required companies to provide audit committees with the resources and authority to engage
independent counsel and advisers to help them carry out their duties. SOX also required audit
committees to establish procedures for receiving whistleblower complaints regarding accounting,
auditing and internal control irregularities and to provide for the confidential and anonymous
treatment of employee concerns regarding such matters. In addition, SOX enhanced the external
auditor’s required communications with the audit committee to include the following:
• A discussion of all critical accounting policies and practices used by the company
• All alternative accounting treatments that have been discussed with management, the
ramifications of the use of alternative disclosures and accounting treatments and the accounting
treatment preferred by the audit firm
• Other material written communications between the auditor and management.
Conclusion: I think the provisions of Sarbanes oxely Act are adequate, We should also focus on
the practicality of ever changing corporote world . A recent report showed that chances of
reinstatement of financial statements are 46% higher for the companies who do follow sarbanes-
oxley act.
See this provision of Sarbanes oxely act.
Officers and directors are prohibited from trading during pension “blackout” periods: The Act
prohibits corporate officers and directors from trading company securities during a pension fund
“blackout” period .
It was never there . It was aptly introduced by Sarbanes-oxely Act.
Solution
The Sarbanes-Oxley , 2002 contains following provisions which determines more adequacy of
control over financial statements.
One of the core elements of Sarbanes-Oxley was to clearly define and place responsibility for a
company’s financial statements with its cchief executive officer (CEO) and chief financial
officer (CFO), SOX mandated that these executives certify the following it.
The Shifting Pharmaceutical Industry Landscape
The document discusses key regulatory developments and trends affecting the pharmaceutical industry's financial reporting landscape. It highlights areas of focus for the SEC based on a review of staff comment letters, including revenue recognition, collaboration agreements, acquired IPR&D assets, material patents, and R&D. It also examines common causes of restatements and provides an overview of recent and upcoming actions from standard-setting bodies like the FASB, IASB, and PCAOB.
IFC Act White paper
The document discusses internal financial controls (IFC) requirements under the Companies Act 2013. It summarizes that the new law requires boards and auditors of all companies to report on IFCs, whereas previously it was only for listed companies. It also notes the new law requires auditor opinion on both financial statements and IFC effectiveness, unlike past requirements. Additionally, it states the new law assigns directors specific responsibilities for establishing IFCs and commenting on their adequacy and effectiveness.
Session 3B Quality Assurance and Building Effective Oversight System - Bruce ...
Session 3B Quality Assurance and Building Effective Oversight System - Bruce ...International Federation of Accountants
The document discusses the role and structure of the Public Company Accounting Oversight Board (PCAOB) as an independent regulator of auditors of public companies in the United States. It outlines the PCAOB's key functions of registration, standard-setting, inspections of audit firms, and investigations and enforcement actions. It also provides an overview of global developments in independent auditor oversight through regulatory bodies established in other countries and regions.Session 3B Quality Assurance and Building Effective Oversight System Bruce Ov...
Session 3B Quality Assurance and Building Effective Oversight System Bruce Ov...International Federation of Accountants
The document discusses the role and structure of the Public Company Accounting Oversight Board (PCAOB) as an independent regulator of auditors of public companies in the United States. It outlines the PCAOB's key functions of registration, standard-setting, inspections of audit firms, and investigations and enforcement actions. It also provides an overview of global developments in independent auditor oversight through regulatory bodies established in other countries and regions.Internal Control over Financial Reporting.pptx
• Authoritative professional guidance provided by the Institute of
Internal Auditors (The IIA)
• Part of the collective knowledge of the Internal Audit profession
(CBOK)
• Essential elements for the effective delivery of Internal Audit
services
Turnbull-guidance-October-2005
This document provides guidance for directors on maintaining internal control and reviewing its effectiveness as required by the Combined Code. It discusses responsibilities of the board and management in establishing a sound system of internal control. The board is responsible for assessing the nature and extent of risks, setting internal control policies, and seeking assurance of effective controls. Management is responsible for implementing controls that manage risks approved by the board. The guidance also covers reviewing the effectiveness of controls, which includes regular reporting to the board and an annual board assessment of the internal control system.
Sarbanes Oxley Act
Carmen Neghina & Hella Rieger
Sarbanes Oxley Act
Introduction
PCAOB
Basic content
Pros and Cons
SEC in Focus (2nd Quarter)
The SEC Chief Accountant discussed considerations for adopting new GAAP standards on revenue recognition, leases and credit losses. He stressed the importance of effective audit committee oversight of the adoption process and thoughtful planning by management for new revenue standard disclosures. The Chief Accountant also emphasized the need for adequate accounting transition disclosures and concurrent implementation of the new standards.
S O X In Telecom Industry
The Sarbanes-Oxley Act (SOX) aims to improve accuracy and reliability of corporate disclosures. For telecom companies, SOX compliance can help address revenue leakages through initiatives to analyze sources of loss and strengthen internal controls. Telecom companies can leverage SOX to optimize processes, accelerate revenue assurance programs, and enhance transparency in financial reporting.
Assignment 2
The document provides an overview of the PCAOB reporting requirements for auditing firms. It discusses how the PCAOB aims to reduce financial fraud by requiring firms to submit annual and current reports on their audit practices and personnel. These reports collect information on the firm to confirm their independence and integrity. The document also outlines auditor responsibilities to detect fraud during audits and alternatives to the PCAOB such as strengthening the SEC.
Financial Integrity Sharing Session_BUMN_14Okt_221013_154824.pdf
This document provides an agenda and presentation materials for a session on ensuring high quality financial reporting for state-owned enterprises (SOEs) in Indonesia. The agenda includes discussions on internal control and benchmarking for internal control over financial reporting, management review controls, and a question and answer session. The presentation materials cover regulations on internal control and ICOFR, ICOFR principles and their role in improving trust in financial reporting, the design and implementation of ICOFR using a top-down risk based approach, and examples of ICOFR practices in countries other than the US and Japan.
IPO Bound? New Strategies, New Ideas and Tips for Success
Moving down the track to an IPO is not for the faint of heart. There are myriad requests and complex requirements—and now with the JOBS Act, companies face even more decisions. These slides by legal, audit and accounting experts in Silicon Valley deliver straight-from-the-trenches advice on what it takes to get your IPO right and are drawn from a RoseRyan seminar.
El-Paso SOX TestingTraining- June 2007
This document provides an introduction to El Paso Corporation's Sarbanes-Oxley Section 404 compliance project. It outlines what employees will learn, including the purpose and requirements of SOX 404, what the project team has accomplished so far in documenting processes and controls, and the next steps of management's testing. It describes the roles of management in evaluating controls versus the external auditors in auditing the financial statements. Key parts of the project plan are summarized, including the timeline, organizational structure, and objectives of management's testing to validate that controls are operating effectively.
Sox In Telecom Industry
The document discusses the Sarbanes-Oxley Act and its implications for telecom companies. It requires executives to certify financial reports, establishes oversight of auditors, and aims to increase accuracy and reliability of corporate disclosures. For telecom companies, complying with SOX can help reduce revenue leakages, align data flows, and accelerate initiatives to plug leakage points.
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Advanced Audit _ Assurance.pptx
- 1. Effects of new regulations & Pronouncements of Auditing. Term Paper on Advanced Audit & Assurance Course Title:
- 2. PREFACE Financial scandals Trust & Perception Of Investors Reliable information to the decision makers Implication of the new regulation and corporate governance 2
- 3. INTRODUCTION Regulations Sarbanes-Oxley Act (SOX) Public Company Accounting Oversight Board (PCAOB) 3
- 4. Why new regulations are needed? Collapse Enron, WorldCom, Parmalat and Ahalid, Quality Efficient audit process 4
- 5. Top five things should know about the new auditor reporting standard. 1. Batting first, there’s a specific order. 2. The Basis for Opinion section is new. 3. Going concern is highlighted. SAS No 5
- 6. Top five things should know about the new auditor reporting standard. 4. The auditor’s responsibilities section is revamped. 5. There is a framework for determining, communicating and documenting key audit matters (KAM). 6
- 7. FORMALIZING VOLUNTARY DISCLOSURE New Customs Audit Regulations Importation/exportation of goods Internal control processes 7
- 8. Implications of the voluntary disclosure program to companies? Daily import/export declaration errors/issues Discrepancies in Processing Trade Customs Handbook Issues identified during internal audits 8
- 9. Implications of the voluntary disclosure program to companies? Issues identified during periodic compliance reviews Issues identified in due diligence Others 9
- 10. Blockchain effects on auditing Impossible to change information Improve audit quality and efficiency 10
- 11. Blockchain effects on auditing Opportunities for auditors to redesign best practices, update rules and procedures, define new standards of the profession 11
- 12. Involvement of external professional firms Independent 3rd parties . Facilitating Customs audits. In conducting customs audits. 12
- 13. How to effectively utilize external professional firms? • Supply chain model planning • Establish Standard Operating Procedures (“SOPs”) • 3rd party compliance reviews • Customs audit support 13
- 14. Increased importance of enterprise credit ranking 14
- 15. Audit Pronouncement Authority of the IAASB’s Pronouncements adopted and prescribed Authority of Pronouncements issued by the IRBA Existing pronouncements 15
- 17. THANKYOU !