Financial: Internal Control and Public Accounting Firm Essay

1289 Words Nov 3rd, 2012 6 Pages
Assignment 1
Unit 1: Introduction to Financial Reporting
Youness Moujane
Kaplan University
GM506: Strategic Financial Analysis
Crystal Gifford Phd.
October 27, 2012

Chapter 1: Case 1-10

1. The Sarbanes-Oxley Act refers to “the Commission” in several sections. To what Commission is the Sarbanes-Oxley Act referring?

The commission that the Sarbanes-Oxley Act refers to is the Securities and Exchange Commission (Gibson, 2013).

2. Describe the responsibility of the Commission in relation to the “Board.”

The Commission is responsible for appointing the five members of the Board. It approves the actions of the Board. And it is responsible for over- sight
…show more content…
11. Describe prohibited activities of the independent auditor. Can the independent auditor perform tax services for an audit client?

The prohibited activities are activities like bookkeeping, financial information systems design and implementation, appraisal or valuation services, actuarial services, internal audit, outsourcing services, management functions or human resources, broker or dealer, investment adviser, or investment banking services, legal services and expert services unrelated to the audit, and any other service that the Board determines, by regulation, is impermissible. Preapproval Required for Non-Audit Services (Gibson, 2013).

12. Describe management’s responsibility in relation to internal controls.

The Commission annually prescribes the rules for internal control structure and procedures for financial reporting. Part of the internal control, the firms must prepare an attestation in accordance with standards for attestation engagements issued or adopted by the Board. Any such attestation shall not be the subject of a separate engagement (Gibson, 2013).

13. Speculate on why Title IV, Section 404, “Management Assessment of Internal
Controls,” has received substantial criticism.

I think because the Commission prescribes the rules yearly, which creates

Related Documents