Sarbanes Oxley Act SEC 404 Term Paper

Pages: 2 (597 words)  ·  Style: APA  ·  Bibliography Sources: 1  ·  File: .docx  ·  Topic: Accounting

Sarbanes-Oxley Act SEC 404

The Sarbanes-Oxley Act of 2002, which is also known under the name Public Company Accounting Reform and Investor Protection Act of 2002.was implemented as a requirement for companies to thoroughly report on internal control measures over financial reporting (Weirich, 2006). It also necessitates that auditors conduct investigations in order to render opinion on that report as well as opinion in response to the internal control (Weirich, 2006). The relaxed laws of the past allowed for accounting scandals of huge proportions, due to the lack of attention towards the internal controls of companies. Public trust in accounting practices and financial reporting diminished because of these scandals, and a detailed and structured measure in the form of the Sarbanes-Oxley Act Section 404 was necessary implemented for companies to regain this trust.Get full Download Microsoft Word File access
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Term Paper on Sarbanes Oxley Act SEC 404 Assignment

Since November 24, 2004, public companies have been required to thoroughly document and assess the effectiveness of internal controls over financial reporting, and 2006 saw the act extended to include smaller companies (Weirich, 2006). In particular, section 404 of the Sarbanes-Oxley Act requires that managers and auditors take on different roles than in the past. At the end of each fiscal year, managers must detail their responsibilities for ensuring and maintaining adequate internal control over financial reporting, and must also assess the effectiveness of these controls. Auditors are then required to independently report on and attest to this assessment provided by the manager. The details involved in these reports include the accurate maintenance of records, assurance that transactions are adequately recorded to enable financial statement preparation, and assurance that unauthorized acquisition, use or disposition of assets is prevented or detected (Weirich, 2006). The auditor is required to perform two independent audits for companies. One audit is conducted over the assessment of internal control put forth… [END OF PREVIEW] . . . READ MORE

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How to Cite "Sarbanes Oxley Act SEC 404" Term Paper in a Bibliography:

APA Style

Sarbanes Oxley Act SEC 404.  (2007, February 6).  Retrieved October 31, 2020, from

MLA Format

"Sarbanes Oxley Act SEC 404."  6 February 2007.  Web.  31 October 2020. <>.

Chicago Style

"Sarbanes Oxley Act SEC 404."  February 6, 2007.  Accessed October 31, 2020.