What accounting issues does the Sarbanes-Oxley Act of 2002 address?

What accounting issues does the Sarbanes-Oxley Act of 2002 address?

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  • 1 decade ago
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    The Sarbanes-Oxley Act (SOX) was triggered by the bankruptcies and alleged audit failures involving such companies as Enron and WorldCom.

    Before SOX, the Auditing Standards Board (ASB) of the AICPA established auditing standards for private and public companies. The PCAOB, which is appointed and overseen by the SEC, now has responsibility for auditing standards for public companies. The ASB continues to oversee private companies.

    An issue that SOX addresses is additional regulation for public companies and their auditors. Auditors are required to attest to management reports on the effectiveness of internal control over financial reporting under Section 404. The Act particularly addressed and changed the relationship between publicly help companies and their audit firms.

    Auditor independence was another key issue of the Act.

    The titles of the Act are:

    TITLE I. PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

    TITLE II—AUDITOR INDEPENDENCE

    TITLE III—CORPORATE RESPONSIBILITY

    TITLE IV—ENHANCED FINANCIAL DISCLOSURES

    TITLE V—ANALYST CONFLICTS OF INTEREST

    TITLE VI—COMMISSION RESOURCES AND AUTHORITY

    TITLE VII—STUDIES AND REPORTS

    TITLE VIII—CORPORATE AND CRIMINAL FRAUD ACCOUNTABILITY

    TITLE IX—WHITE-COLLAR CRIME PENALTY ENHANCEMENTS

    TITLE X—CORPORATE TAX RETURNS

    TITLE XI—CORPORATE FRAUD AND ACCOUNTABILITY

    Here is a link to the legislation

    http://www.pcaobus.org/About_the_PCAOB/Sarbanes_Ox...

    Source(s): B.S. in Accounting
  • Anonymous
    5 years ago

    As far as I know, to put it in simple (if not the simplest terms), the Act means to say that companies should keep copies of all correspondences, of all types, especiall emails or faxes. If the company gets involved in a case, and the court asks for correspondences, and they find out that the company has deleted even just one email, it's a count against the Act.

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