Sarbanes Oxley Act Case Study

Client, The Sarbanes Oxley Act is a very good aspect of a company to inquire about. In a way, it has paved the way a business should be handled internally. I am going to education you on what the Sarbanes Oxley Act, also known as SOX, has done to secure and improve businesses, the changes in the act that have been effected, and how the principles and assumptions of accounting are affected. This should put your mind at ease, and give you the information you are looking for. The SOX Act was passed to curve financial abuses at companies that issue their stock to the public. It requires that the public companies apply both accounting oversight and stringent internal controls (Fundamental Acct. Principles, pg. 12, 2011). This keeps companies from falsifying records for their own personal gain, and if so done, the companies liable will be penalized to an …show more content…
This is something that is showing very positively. The new challenges for the auditors are to access and respond to risks during a financial statement audit, and have a main goal not to zero out this risk, but to limit the risk to a low level, to provide truth and ethics in each statement (The Finance Pig, 2013). Audits should be done continuously, one right after the other, in step by step form for accuracy, to the best of a companies’ ability. This keeps all eyes on the process at which is being performed, and if it is being done correctly. Internal ways of handling a company to ensure minimal risks for any major or further audit are being strictly enforced. An auditor should question each possible aspect of why or how a report was misrepresented. This will include fairness from a personal and also a professional point of view. Although computerized accounting systems are highly used and increasing every day, original documents are more reliable than an electronic scan, or photocopy (The Finance Pig,