The Sarbanes-Oxley Act

Term Paper # 107626

Accounting
Business > Accounting
Business > Finance, Investment and Banking

Looks at the internal controls required by the Sarbanes-Oxley Act of 2002.

5,856 words () | 25 sources | APA | 2008 United States

Paper Summary:

This paper explains that the Sarbanes-Oxley Act enacted in 2002 has changed the way companies do business. Stringent internal controls are now woven into the fabric of daily operations of public companies. Rigorous auditing is performed to ensure compliance with the requirements of the legislation. The paper then notes that the average investor, however, is not a CPA working for a large auditing company and that, for the layman, there are several things to look for in a company before investing capital. This paper discusses this criterion.

Table of Contents:
Executive Summary
Introduction
Code of Conduct
The Control Environment
Remediation
Reporting Infractions
Motivation
Financial Reporting
Information & Communication
Risk Assessment
Monitoring
Conclusion

From the Paper:

"Organizational structure should include a risk officer, financial officer, and internal auditor. These positions should all exist within an organization if it is serious about minimizing risk. Organizational policies should not be so loose that it tempts managers into an unethical situation. These policies should not allow management to take unnecessary risk that go unchecked by others and should have required documentation before being allowed to proceed. "Lastly, the company must periodically review its risk assessments process and management should respond if any new risk were identified.""

Sample of Sources Used:

Berliet, Jean-Pierre. (2007). The Virtual insurance company. Risk Management. New York, NY: March 2007. Vol. 54 Iss. 3; pg. 30.
Business Editors; Software Writers (2004, December 15) Business Wire
Callaghan, Joseph H. (2007). Assessing the control environment using a balanced scorecard approach. The CPA Journal. New York: March 2007. Vol.77 Iss.3; pg. 58.
Colapinto, David, Kohn, Michael D., Kohn, Stephen M. (2004) Whistleblowers. Westport, CT: Praeger Publishers
Coe, Martin J. (2005). Trust Services: A better way to evaluate I.T. controls. Journal of Accountancy. New York: March 2005, Vol.199 Iss. 3 pg. 69.