Sox Research Paper
Running head: Nonprofits and SOX
Heather Tanenbaum
Student ID: 3750548620
Accounting Capstone: Senior Seminar in Accounting ACC499 004016
Summer 2009
Nonprofits and the Sarbanes Oxley Act
Submitted:
Submitted to: Tee M. Thein
Table of Contents
Abstract
Introduction
SOX regulations for nonprofits
Reasons for nonprofits to adopt SOX
Conclusion
Research file memorandum
Communication memorandum
References
Abstract
Introduction
The Sarbanes-Oxley Act (SOX) of 2002 (U.S. House of Representatives 2002) was passed by congress as a result of a wave of accounting scandals and related financial irregularities in corporations such as Enron, WorldCom and Tyco. SOX is called the most significant securities legislation since 1933 and 1934 securities ACT. The Act attempted to make ethics more black and white rather than a gray area. The increased guidelines have changed businesses and business relationships. These new requirements have placed greater demands on directors, audit committees, auditors and management. Most, of these provisions where only made towards publicly held companies, similar regulations targeted nonprofit organizations (Panel on the Nonprofit Sector 2005). Two hundred and fifteen nonprofit organizations have voluntarily adopted provisions of the Sarbanes-Oxley Act of 2002 (SOX). Many, nonprofits are currently in the process of adopting SOX. The Panel on the Nonprofit Sector (2005), in its final report to Congress in June 2005, recommends more than 120 actions to be taken by charitable organizations, Congress and the IRS (Internal Revenue Service) to strength nonprofits against, transparency, governance and accountability. The most significant provision of the Act is the requirements in Section 404 the reporting on the effectiveness of internal controls over the financial reporting. PCAOB auditing standard 2 requires that the audit of internal control be integrated
Heather Tanenbaum
Student ID: 3750548620
Accounting Capstone: Senior Seminar in Accounting ACC499 004016
Summer 2009
Nonprofits and the Sarbanes Oxley Act
Submitted:
Submitted to: Tee M. Thein
Table of Contents
Abstract
Introduction
SOX regulations for nonprofits
Reasons for nonprofits to adopt SOX
Conclusion
Research file memorandum
Communication memorandum
References
Abstract
Introduction
The Sarbanes-Oxley Act (SOX) of 2002 (U.S. House of Representatives 2002) was passed by congress as a result of a wave of accounting scandals and related financial irregularities in corporations such as Enron, WorldCom and Tyco. SOX is called the most significant securities legislation since 1933 and 1934 securities ACT. The Act attempted to make ethics more black and white rather than a gray area. The increased guidelines have changed businesses and business relationships. These new requirements have placed greater demands on directors, audit committees, auditors and management. Most, of these provisions where only made towards publicly held companies, similar regulations targeted nonprofit organizations (Panel on the Nonprofit Sector 2005). Two hundred and fifteen nonprofit organizations have voluntarily adopted provisions of the Sarbanes-Oxley Act of 2002 (SOX). Many, nonprofits are currently in the process of adopting SOX. The Panel on the Nonprofit Sector (2005), in its final report to Congress in June 2005, recommends more than 120 actions to be taken by charitable organizations, Congress and the IRS (Internal Revenue Service) to strength nonprofits against, transparency, governance and accountability. The most significant provision of the Act is the requirements in Section 404 the reporting on the effectiveness of internal controls over the financial reporting. PCAOB auditing standard 2 requires that the audit of internal control be integrated
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