Sarbanes-Oxley Act of 2002 and the Relation to Auditing
Unit 4 Assignment
Abstract
In this assignment I will be looking at what Sarbanes-Oxley Act of 2002 is and why it came to be. How SOX has affected the accounting and auditing industry and what the benefits and costs are and what changes have happened or should happen moving into the future with SOX.
Unit 4 Assignment
A family man has invested a portion of his retirement into a growing stock and has been seeing remarkable growth over the past year and decides to put most of his life savings into the stock to really see his money grow. A couple years past and he is shocked at how fast his money has grown to where he doesn’t follow it too often. One day he starts to hear news about the company his money is in and doesn’t end up getting around to checking on his stock till a little while later and finds out that his stock in Enron went from a price of $90 a share to just under a dollar and all his money is pretty much gone. A scenario like this has happen too many people with the collapse of such major companies such as Enron, WorldCom, Tyco, and Arthur Andersen. Large amounts of fraud erupted all around the same time frame after the beginning of the century and brought about big change in the form of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 changed the way auditing is done today, but is it worth it? To the investors and creditors that rely on accurate financial information, SOX is worth it, but what about the corporations picking up the bill to stay in compliance of the new regulations. In this paper, I am going to look at what Sarbanes-Oxley Act of 2002 is, how it affects corporations, and auditing. I will also compare and contrast the benefits and costs of SOX and come to an opinion of whether SOX should continue as it is or if it should be stricter in regulation or less strict.
Sarbanes-Oxley Act of 2002 also known as the
Abstract
In this assignment I will be looking at what Sarbanes-Oxley Act of 2002 is and why it came to be. How SOX has affected the accounting and auditing industry and what the benefits and costs are and what changes have happened or should happen moving into the future with SOX.
Unit 4 Assignment
A family man has invested a portion of his retirement into a growing stock and has been seeing remarkable growth over the past year and decides to put most of his life savings into the stock to really see his money grow. A couple years past and he is shocked at how fast his money has grown to where he doesn’t follow it too often. One day he starts to hear news about the company his money is in and doesn’t end up getting around to checking on his stock till a little while later and finds out that his stock in Enron went from a price of $90 a share to just under a dollar and all his money is pretty much gone. A scenario like this has happen too many people with the collapse of such major companies such as Enron, WorldCom, Tyco, and Arthur Andersen. Large amounts of fraud erupted all around the same time frame after the beginning of the century and brought about big change in the form of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 changed the way auditing is done today, but is it worth it? To the investors and creditors that rely on accurate financial information, SOX is worth it, but what about the corporations picking up the bill to stay in compliance of the new regulations. In this paper, I am going to look at what Sarbanes-Oxley Act of 2002 is, how it affects corporations, and auditing. I will also compare and contrast the benefits and costs of SOX and come to an opinion of whether SOX should continue as it is or if it should be stricter in regulation or less strict.
Sarbanes-Oxley Act of 2002 also known as the
References: Bisoux, Tricia. (2005). The Sarbanes-Oxley : BizEd. http://www.aacsb.edu/publications/archives/julyaug05/p24-29.pdf Bumgardner, Larry. (2003). Reforming Corporate America – How does the Sarbanes-Oxley Act impact American Business. Grazaido Business Review. http://gbr.pepperdine.edu/2010/08/reforming-corporate-america/ Cosgrove, Sarah; Niederjohn, Scott. (2006). The Effects of Sarbanes-Oxley on the Public Accounting Industry. http://www.economics.neu.edu/activities/seminars/documents/cosgrove.pdf Roh, Chul-Young; Ryu, Tae; and Uliss, Barbara. (2006). The Effect of the Sarbanes-Oxley Act on Auditor’s Audit Performance. http://www.aabri.com/manuscripts/08127.pdf A Cost-Benefit Analysis of Sarbanes-Oxley Compliance. (2007, October 9). The IIA and The Rehmann Group. http://www.theiia.org/chapters/pubdocs/2/ACost_BenefitAnalysisofSOXOct2007.pdf Sarbanes-Oxley: Five years under the thumb. (2007, Jul 26). The Economist. http://www.economist.com/node/9545905?story_id=9545905