Audit Compliance Summary

Improved Essays
According to section 301.4 of SOX 2002, the public company audit committee is required to implement procedures for the receipt, retention, and treatment of complaints received by the whistleblowers concerning auditing matters, internal accounting controls, or accounting. Also, the complaints have to be treated confidentially by the audit committee by making whistleblowing procedures for the submission around dubitable accounting or auditing matters to be anonymous. To encourage this, the audit committee should make and control an effective corporate whistleblower hotline by proving to whistleblowers the secrecy of their complaints. There are some potential pitfalls that may occur in a whistleblower program which should be avoided by the auditing committee like the auditing committee does not take action when it receives complaints.
According to International Standards for the Professional
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Those provisions would have deterred the actions of Scott Sullivan, CFO at WorldCom because they notify upper management about the significance of the financial reporting process.
Sullivan capitalized the network lease, which was wrong. According to ASC 840, the network lease must be treated as the operating lease. In reaction to this mistaken action, Cynthia evaluated a fraud risk depending on AUC 240 and AS 12, and then she found out evidence that endorsed her professional skepticism as requirements of AUC 610.
Finally, the regulation, other legal reforms, and teaching about moral and ethical values conducted in school, at home, or through other avenues outside legislation are significant to preventing and deterring financial reporting fraud and other unethical

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