The Sarbanes-Oxley Act Summary

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The Sarbanes-Oxley Act(SOX) of 2002 was passed by the U.S congress to protect business investors from fraudulent activities by the corporations. The Sarbanes-Oxley Act passed down in responses to a series of high-profile financial scandals that occurred in the early 2000s at companies including WorldCom and Tyco that rattled investor confidence. The result was almost $6 trillions of stock market value loss. The act, drafted by U.S. Congressmen Paul Sarbanes and Michael Oxley, was aimed at improving corporate governance and accountability.

Due to SOX Act, Tens of thousands of companies face the task of ensuring their accounting operations of following the Sarbanes-Oxley Act section. Auditing departments typically first have a comprehensive external audit by a
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Trinity stated net income in their financial statement for 2010, 2011, and the first two quarters of 2012. Later found out that instead of income of $4.9 million it was $25.6 million loss. As a result, Trinity’s former Chief Executive officer William Enloe was found guilty involves fraudulent manipulation of the company’s financial results and failure to implement sufficient internal accounting controls and the violation of SOX Act.

The check and balance system is one of the internal controls business use where no one has control of one another. This system involves more than one personal, it separate handling (receipt and deposits) functions from record keeping functions.. This method help keep financial reported more accurate which prevent accounting fraud

The protection of cash in a business is number one priority. Which bring us to the next internal control to protection of cash funds. All funds must keep in locked box or drawer and restrict the number of employees who have access to the key. Also limit the petty cash replenishment amount to a total that will require replenishment at least
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