a
Introduction: The Sarbanes-Oxley Act 2002 or SOX has a number of major implications for accountants. It was expected that it will help restore investor confidence in the financial reports of publicly traded companies. Its follower’s believed that the act would minimize corporate governance accounting and financial reporting abuses.
The role of the audit committee as SOX specifies, with regard to the annual audit conducted by the company’s external auditor.
b
Introduction: The Sarbanes-Oxley Act 2002 or SOX has a number of major implications for accountants. It was expected that it will help restore investor confidence in the financial reports of publicly traded companies. Its follower’s believed that the act would minimize corporate governance accounting and financial reporting abuses.
The relationship that should exist between the audit committee and a company’s internal audit staff.
c
Introduction: The Sarbanes-Oxley Act 2002 or SOX has a number of major implications for accountants. It was expected that it will help restore investor confidence in the financial reports of publicly traded companies. Its follower’s believed that the act would minimize corporate governance accounting and financial reporting abuses.
To explain: The reason for the members of the audit committee to be outside board members.
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ADVANCED FINANCIAL ACCOUNTING IA
- True or False Independent Auditor is responsible for preparing the financial statements, establishing and maintaining adequate internal control over financial reporting (ICFR), and evaluating the effectiveness of ICFR. * Under Sarbanes–Oxley Section 301 public company audit committees are directly responsible for the appointment, compensation, and oversight of the work of any registered public accounting firm employed by their company. * Auditors are required by the Security and Exchange Commission to report to the audit committee of the publicly-traded company all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management officials. * CFO and the audit committee depend heavily on one another * Included in the Environment disclosures are the risks and opportunities due to climate change, procurement practices with respect to local suppliers, and anti-corruption *arrow_forwardNYSE corporate governance requirements of companies listed on this stock exchange,, state how it is intended to help to address the risk of fraud in publicly traded organizations. 1. Boards must have an audit committee with a minimum of three independent members. 2.The audit committee must have a written charter that addresses the committee’s purpose and responsibilities, and the committee must produce an audit committee report; there must also be an annual performance evaluation of the committee.arrow_forward**Objective Question:** Which set of standards governs the conduct of audits performed by certified public accountants (CPAs) in the United States? A) IFRS B) GAAP C) GAAS D) ISAarrow_forward
- If a nonissuer wants an accountant to perform an examination of its internal controls, the accountant should follow:a. PCAOB AS 2201, “An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements.”b. AICPA AT 501, “An Examination of an Entity’s Internal Control over Financial Reporting That Is Integrated with an Audit of Its Financial Statements.”c. AICPA AU-C 315, “Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.”d. FASB Concepts Statement No. 1, “Objectives of Financial Reporting by Business Enterprises.”arrow_forwardISA 200: Overall Objective of the Independent Auditor, and the Conduct of an Audit in Accordance with International Standards on Auditing states that the overall objective of the independent auditor is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to report on the financial statements in accordance with the auditor’s findings.” REQUIRED: Briefly discuss THREE (3) benefits of a financial statement audit to a company. Discuss FOUR (4) circumstances that could impose threats to the auditor’s independence. State ONE (1) example for each of the circumstances. Auditor’s failure to exercise sufficient care and skill in carrying out their audit might lead to legal action by those who claim to rely on the work of the auditor (Che-Ahmad et. Al., 2018). REQUIRED: Discuss THREE (3) safeguards by auditors that could help minimize the risk of legal liability.arrow_forwardQUESTION 9 Match the appropriate term with each of the following definitions. ✓ Accounting standards issued by FASB in the US ✓ Auditing standards used in the US An examination of financial statements by independent CPAS Directed by the audit committee to evaluate the company's processes, systems, and internal controls ✓ Framework of rules, processes, and practice by which the company is directed and controlled QUESTION 10 Financial statements of public companies are required to be audited by an independent certified public accounting firm the Audit Committee of the Board of Directors the Chief Financial Officer all of the above none of the above A. Generally Accepted Auditing Standards B. Internal Auditors C. Generally Accepted Accounting Principles D. External Audit E. Corporate Governancearrow_forward
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