Section 404 is linked to section 302 since required an annual management assessment of Internal Control and an external audit that needs to provide an opinion on its reliability. The section requires a report that acknowledge the responsibility of management for creating and maintaining internal controls in order to manage the risk that can potentially cause inaccurate, fraudulent or incomplete data to be disclosed to stakeholders. The report should also contain the effectiveness of the internal control structure as of the end of the most recent fiscal year. External auditors needs to provide an opinion on the reliability of the management representation on the effectiveness of internal controls. “The attestation made under this section shall be made in accordance with standards for attestation engagements issued or adopted by the Board”.1
Other important sections are 802, and 1107. These are Criminal penalties for violation of SOX and Criminal penalties for retaliation against whistleblowers. This provisions creates new and broader federal crimes for justice obstruction and …show more content…
The most critical sections of the SOX act for small companies is Section 302 and 404. Small companies don’t have all the resources they need to implement such rules. Other than the accounting department, The IT department plays a special roll in implementing these rules from sections 302 and 404. The decision process will take longer from management since decision-making becomes more complicated. Also, it would be difficult to find a manager that is good from all sides. Moreover since the auditors need to be more accountable for the audit reports, the audit fees have increased since 2002. Because the liabilities for the auditors increases the audit fees increases. “Between 2001 and 2004, total audit and audit-related fees increased 103% for 496 of the S&P 500 companies. The fees increased 41% in 2004
Other important sections are 802, and 1107. These are Criminal penalties for violation of SOX and Criminal penalties for retaliation against whistleblowers. This provisions creates new and broader federal crimes for justice obstruction and …show more content…
The most critical sections of the SOX act for small companies is Section 302 and 404. Small companies don’t have all the resources they need to implement such rules. Other than the accounting department, The IT department plays a special roll in implementing these rules from sections 302 and 404. The decision process will take longer from management since decision-making becomes more complicated. Also, it would be difficult to find a manager that is good from all sides. Moreover since the auditors need to be more accountable for the audit reports, the audit fees have increased since 2002. Because the liabilities for the auditors increases the audit fees increases. “Between 2001 and 2004, total audit and audit-related fees increased 103% for 496 of the S&P 500 companies. The fees increased 41% in 2004