As the controller of a financial company, take pride in the and internal control systems have developed for the company. You and your staff have kept up with changes in the accounting industry and been diligent in updating the systems to meet new accounting standards. Your outside auditor, which has been reviewing the company's books for 15 years, routinely complimented you on your thorough procedures. The passage of the Sarbanes-Oxley Act, with its emphasis on testing internal control systems, initiated several changes. You have studied the law and made adjustments to ensure you comply with the regulations, even though it has created additional work. Your auditors, however, have chosen to interpret SOX very aggressively—too much so, in your opinion. The auditors have recommended that you make costly improvements to your systems and also enlarged the scope of the audit process , raising their fees. When you question the partner in charge, he explains that the complexity of the law means that it is open to interpretation it is better to err on side of caution risk. You are not pleased with this answer, as you believe company is in compliance with SOX, and considerchanging auditors. Using a web search tool, locate articles about this topic and then write the responses to the following questions.Be sure to support your arguments and cite your sources. Ethical Dilemma: Should you change auditors because your current one is too stringent in applying theSarbanes-Oxley Act? What other steps could you take to this situation? Sources: Loren Kasuske, "The 4 Biggest Pros and Cons of the Sarbanes-Oxley Act, https://ktconnections.com , June 8, 2017; Terry Sheridan, "Financial Services Spend More than $1M Annually on SOX," https://www.accountingweb.com , August 2, 2016; "Sarbanes-Oxley Is Paying Off for Companies Despite Increased Costs and Hours. Protiviti Survey Finds." http://www.pmewswirexom , June 2, 2016; Daniel Kim. "Top 3 Ways to Reduce SOX Compliance Costs," https://www.soxhub.com , December 14, 2015.

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Answer 1

Textbook Question

Chapter 14, Problem 1EA

As the controller of a financial company, take pride in the and internal control systems have developed for the company. You and your staff have kept up with changes in the accounting industry and been diligent in updating the systems to meet new accounting standards. Your outside auditor, which has been reviewing the company's books for 15 years, routinely complimented you on your thorough procedures.

The passage of the Sarbanes-Oxley Act, with its emphasis on testing internal control systems, initiated several changes. You have studied the law and made adjustments to ensure you comply with the regulations, even though it has created additional work. Your auditors, however, have chosen to interpret SOX very aggressively—too much so, in your opinion. The auditors have recommended that you make costly improvements to your systems and also enlarged the scope of the audit process, raising their fees. When you question the partner in charge, he explains that the complexity of the law means that it is open to interpretation it is better to err on side of caution risk. You are not pleased with this answer, as you believe company is in compliance with SOX, and considerchanging auditors.

Using a web search tool, locate articles about this topic and then write the responses to the following questions.Be sure to support your arguments and cite your sources.

Ethical Dilemma: Should you change auditors because your current one is too stringent in applying theSarbanes-Oxley Act? What other steps could you take to this situation?

Sources: Loren Kasuske, "The 4 Biggest Pros and Cons of the Sarbanes-Oxley Act,https://ktconnections.com, June 8, 2017; Terry Sheridan, "Financial Services Spend More than $1M Annually on SOX,"https://www.accountingweb.com, August 2, 2016; "Sarbanes-Oxley Is Paying Off for Companies Despite Increased Costs and Hours. Protiviti Survey Finds."http://www.pmewswirexom, June 2, 2016; Daniel Kim. "Top 3 Ways to Reduce SOX Compliance Costs," https://www.soxhub.com, December 14, 2015.

Expert Solution & Answer

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

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Answer 2

Textbook Question

Chapter 14, Problem 1EA

As the controller of a financial company, take pride in the and internal control systems have developed for the company. You and your staff have kept up with changes in the accounting industry and been diligent in updating the systems to meet new accounting standards. Your outside auditor, which has been reviewing the company's books for 15 years, routinely complimented you on your thorough procedures.

The passage of the Sarbanes-Oxley Act, with its emphasis on testing internal control systems, initiated several changes. You have studied the law and made adjustments to ensure you comply with the regulations, even though it has created additional work. Your auditors, however, have chosen to interpret SOX very aggressively—too much so, in your opinion. The auditors have recommended that you make costly improvements to your systems and also enlarged the scope of the audit process, raising their fees. When you question the partner in charge, he explains that the complexity of the law means that it is open to interpretation it is better to err on side of caution risk. You are not pleased with this answer, as you believe company is in compliance with SOX, and considerchanging auditors.

Using a web search tool, locate articles about this topic and then write the responses to the following questions.Be sure to support your arguments and cite your sources.

Ethical Dilemma: Should you change auditors because your current one is too stringent in applying theSarbanes-Oxley Act? What other steps could you take to this situation?

Sources: Loren Kasuske, "The 4 Biggest Pros and Cons of the Sarbanes-Oxley Act,https://ktconnections.com, June 8, 2017; Terry Sheridan, "Financial Services Spend More than $1M Annually on SOX,"https://www.accountingweb.com, August 2, 2016; "Sarbanes-Oxley Is Paying Off for Companies Despite Increased Costs and Hours. Protiviti Survey Finds."http://www.pmewswirexom, June 2, 2016; Daniel Kim. "Top 3 Ways to Reduce SOX Compliance Costs," https://www.soxhub.com, December 14, 2015.

Expert Solution & Answer

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

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Answer 3

Textbook Question

Chapter 14, Problem 1EA

As the controller of a financial company, take pride in the and internal control systems have developed for the company. You and your staff have kept up with changes in the accounting industry and been diligent in updating the systems to meet new accounting standards. Your outside auditor, which has been reviewing the company's books for 15 years, routinely complimented you on your thorough procedures.

The passage of the Sarbanes-Oxley Act, with its emphasis on testing internal control systems, initiated several changes. You have studied the law and made adjustments to ensure you comply with the regulations, even though it has created additional work. Your auditors, however, have chosen to interpret SOX very aggressively—too much so, in your opinion. The auditors have recommended that you make costly improvements to your systems and also enlarged the scope of the audit process, raising their fees. When you question the partner in charge, he explains that the complexity of the law means that it is open to interpretation it is better to err on side of caution risk. You are not pleased with this answer, as you believe company is in compliance with SOX, and considerchanging auditors.

Using a web search tool, locate articles about this topic and then write the responses to the following questions.Be sure to support your arguments and cite your sources.

Ethical Dilemma: Should you change auditors because your current one is too stringent in applying theSarbanes-Oxley Act? What other steps could you take to this situation?

Sources: Loren Kasuske, "The 4 Biggest Pros and Cons of the Sarbanes-Oxley Act,https://ktconnections.com, June 8, 2017; Terry Sheridan, "Financial Services Spend More than $1M Annually on SOX,"https://www.accountingweb.com, August 2, 2016; "Sarbanes-Oxley Is Paying Off for Companies Despite Increased Costs and Hours. Protiviti Survey Finds."http://www.pmewswirexom, June 2, 2016; Daniel Kim. "Top 3 Ways to Reduce SOX Compliance Costs," https://www.soxhub.com, December 14, 2015.

Expert Solution & Answer

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

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Answer 4

Textbook Question

Chapter 14, Problem 1EA

As the controller of a financial company, take pride in the and internal control systems have developed for the company. You and your staff have kept up with changes in the accounting industry and been diligent in updating the systems to meet new accounting standards. Your outside auditor, which has been reviewing the company's books for 15 years, routinely complimented you on your thorough procedures.

The passage of the Sarbanes-Oxley Act, with its emphasis on testing internal control systems, initiated several changes. You have studied the law and made adjustments to ensure you comply with the regulations, even though it has created additional work. Your auditors, however, have chosen to interpret SOX very aggressively—too much so, in your opinion. The auditors have recommended that you make costly improvements to your systems and also enlarged the scope of the audit process, raising their fees. When you question the partner in charge, he explains that the complexity of the law means that it is open to interpretation it is better to err on side of caution risk. You are not pleased with this answer, as you believe company is in compliance with SOX, and considerchanging auditors.

Using a web search tool, locate articles about this topic and then write the responses to the following questions.Be sure to support your arguments and cite your sources.

Ethical Dilemma: Should you change auditors because your current one is too stringent in applying theSarbanes-Oxley Act? What other steps could you take to this situation?

Sources: Loren Kasuske, "The 4 Biggest Pros and Cons of the Sarbanes-Oxley Act,https://ktconnections.com, June 8, 2017; Terry Sheridan, "Financial Services Spend More than $1M Annually on SOX,"https://www.accountingweb.com, August 2, 2016; "Sarbanes-Oxley Is Paying Off for Companies Despite Increased Costs and Hours. Protiviti Survey Finds."http://www.pmewswirexom, June 2, 2016; Daniel Kim. "Top 3 Ways to Reduce SOX Compliance Costs," https://www.soxhub.com, December 14, 2015.

Expert Solution & Answer

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

Answer 8

Expert Solution & Answer

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To determine:

Whether the auditors should be changed because the current one is too stringent in applying the Sarbanes-Oxley Act, and what other steps could be taken to resolving this situation.

Introduction:

The Sarbanes-Oxley Act (SOX) was passed by the US Congress in 2002, in terms to protecting investors from fraudulent financial reporting by corporations such as auditors, accountants and corporate officers.

Answer 12

Explanation of Solution

By not complying with the SOX Act, the company may face larger issues in the future with the mistrust of investors and eventually losing them, which would affect the capital intake and stock market value of the firm.

Therefore, it would be more relevant for the medium-sized financial services company to take in the input of the auditors and make more relevant changes in accordance to the relevance to the act because if not; there can be risks which would have to be taken. Believing that the company follows the passage of the SOX Act, it would not suffice that all the sections of the Act are followed. Thereby, suggesting keeping the auditors, and rather renovate the company's operational facilities.

In accordance to resolve the issue, first the Board of Directors or the top management would have to be briefed about the whole SOX Act and should be notified of the risks and losses which would have to be faced with not fully complying with the Act, and how it can affect their shareholdings as a result.

Then full review of the company's books in-house should be done to understand the points in which they are not completely following the Act.

And last, subsistent changes to the company should be made and new contingent plans should be made following the course of the Act. This would allow them to relive the streak of continuous compliments by their auditors on their procedures.

Answer 13

Ch. 14.1 - Explain who uses financial information.Ch. 14.1 - Differentiate between financial accounting and...Ch. 14.1 - How do GAAP, the FASB, and the IASB influence the...Ch. 14.2 - Compare the responsibilities of public and private...Ch. 14.2 - Summarize the major changes affecting accounting...Ch. 14.3 - Explain the accounting equation.Ch. 14.3 - Describe the six-step accounting cycle.Ch. 14.3 - What role do computers and other technology play...Ch. 14.4 - What is a balance sheet?Ch. 14.4 - What are the three main categories of accounts on...

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