Sarbanes-Oxley Section 404
Sarbanes Oxley Act, 2002.
Outline
In this paper the Sarbanes Oxley Act with particular reference to the section 404 is discussed in detail. We shall start the paper with providing background information to the Sarbanes Oxley Act, 2002. This section explores the environment that spurred the creation of the act and the need for such legislation. The second section provides an introduction to the Sarbanes Oxley Act section 404 which explores the provisions of Section 404. The next section on ‘Internal Controls Feature of section 404 of the Act’ provides an interpretation and the implication of internal control and the consequences that SOX 404 has on company affairs and the changes it has necessitated is discussed. The accounting profession and practice is affected by the provisions of SOX 404 and the future responsibilities and requirements of auditors and the possible difficulties are discussed in the ‘Auditing and the Impacts on Auditors’ section.
While the normal functioning of the company and the provisions of the section is clear, The ‘Other unanticipated events’ section of the paper explores the unknown and un thought of difficulties that will be encountered as in the case of a merger and other transactions between firms which will be affected by the provisions is explored with illustrations. There are areas in the law regarding transactions like an acquisition of a company and the application of this act which is not certain and the result could be undesirable from the point of view of both the parties when the provisions of the section is mandatory to both. These issues are important and need be resolved at the earliest. The importance of IT cannot be stressed enough and the IT requirements that are a must in implementing the provision of the SOX act is explored I detail in the ‘Technology and system requirements’ section of the paper. A summary of the hallmarks of the discussion and opinions and arguments on the subject by eminent thinkers and views
Outline
In this paper the Sarbanes Oxley Act with particular reference to the section 404 is discussed in detail. We shall start the paper with providing background information to the Sarbanes Oxley Act, 2002. This section explores the environment that spurred the creation of the act and the need for such legislation. The second section provides an introduction to the Sarbanes Oxley Act section 404 which explores the provisions of Section 404. The next section on ‘Internal Controls Feature of section 404 of the Act’ provides an interpretation and the implication of internal control and the consequences that SOX 404 has on company affairs and the changes it has necessitated is discussed. The accounting profession and practice is affected by the provisions of SOX 404 and the future responsibilities and requirements of auditors and the possible difficulties are discussed in the ‘Auditing and the Impacts on Auditors’ section.
While the normal functioning of the company and the provisions of the section is clear, The ‘Other unanticipated events’ section of the paper explores the unknown and un thought of difficulties that will be encountered as in the case of a merger and other transactions between firms which will be affected by the provisions is explored with illustrations. There are areas in the law regarding transactions like an acquisition of a company and the application of this act which is not certain and the result could be undesirable from the point of view of both the parties when the provisions of the section is mandatory to both. These issues are important and need be resolved at the earliest. The importance of IT cannot be stressed enough and the IT requirements that are a must in implementing the provision of the SOX act is explored I detail in the ‘Technology and system requirements’ section of the paper. A summary of the hallmarks of the discussion and opinions and arguments on the subject by eminent thinkers and views
References: Anderson, David R. (2006) “Modern Business Statistics” Thomson South-Western. Bullock, Jane A; Haddow, George. (2006) “Introduction to Homeland Security” Butterworth-Heinemann. Chew, Pat K. (1993) “Directors’ and Officers’ Liability” Practicing Law Institute. Coates, John C. (2007) “The Goals and Promise of the Sarbanes–Oxley Act” Journal of Economic Perspectives, vol Cobb, Charles G. (2005) “Enterprise Process Mapping: Integrating Systems for Compliance and Business ...” American Society for Quality. Defond, Mark. L; Francis, Jere. R. (2005) “Audit Research after Sarbanes-Oxley” Auditing: A Journal of Practice & Theory, vol Fox, Christopher. (2006) “IT Control Objectives for Sarbanes-Oxley: The Role of IT in the Design and ...” ISACA Goodman, Amy L; Olson, John F. (2002) “A Practical Guide to SEC Proxy and Compensation Rules” Aspen Publishers Online. Kairab, Sudhanshu. (2004) “A Practical Guide to Security Assessments” CRC Press. Levey, Marc M; Steven, C. Wrappe; Kerwin, Chung. (2007) “Transfer Pricing Rules and Compliance Handbook” CCH. Lin, Heng Hsieu; Wu, Frederick H. (2006, Mar) “Limitations of Section 404 of the Sarbanes-Oxley Act” The CPA Journal, vol Loomis, Erik. (2003, Jan) “Sarbanes-Oxley Act” Business law Journal, vol. 46, no. 2, pp: 23-26 Mccarthy, Ed. (2004) “Tips for the Sarbanes-Oxley Learning Curve: The Act Has Brought More Complexity to Firm Management; Here’s Some Broad-Based Help” Journal of Accountancy, vol Mcconnell, Donald K; Banks, George Y. (2003) “How Sarbanes-Oxley Will Change the Audit Process: CPAs Will Have to Develop New Procedures and Scrap Some Old Ones” Journal of Accountancy, vol Moeller, Robert R. (2004) “Sarbanes-Oxley and the New Internal Auditing Rules” John Wiley and Sons. Ramos, Michael J. (2004) “How to Comply with Sarbanes-Oxley Section 404: Assessing the Effectiveness ...” John Wiley and Sons. Romano, Roberta. (2005, May) “The Sarbanes-Oxley Act and the Making of Quack Corporate Governance” The Yale Law Journal, vol Shanley, Richard P. (2004) “Financing Technology’s Frontier: Decision-Making Models for Investors and ...” John Wiley and Sons. Snedaker, Susan. (2006) “Syngress IT Security Project Management Handbook” Syngress. Sobel, Paul J. (2007) “Auditor’s Risk Management Guide: Integrating Auditing and ERM” CCH. Sonmelitter, Robert J; (2005) “Miller Sox 404 for Small, Publicly Held Companies: Internal Control ...” CCH Tax and Accounting. Stewart, Evan. C. (2008, Feb) “The False Promise of Reform” The New York Law Journal, vol United States Government Accountability Office. (2007) “Financial Management” DIANE Publishing.