the audit committee is a fellow of the ICAA (3) All members of the AC will be financially literate. (4) The responsibilities of the audit committee include: integrity of financial reporting; risk management & internal control framework; &oversight of independence of external & internal auditors. (5) Qantas rotates the lead audit partner every five years and imposes restrictions on the ex-employees of the external auditor Additional Question 1. Related party transactions (a) - May be conducted
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many different suggestions on improvements. History of Sarbanes-Oxley Act Scandals of many forms shape regulations in many aspects. The Sarbanes Oxley Act was a new regulation that was initiated because of financial scandals. Tyco‚ WorldCom and Enron were companies that violated the trust of the shareholders and consumers worldwide. Accounting firms also were responsible for these financial scandals because the firms did not have honesty and integrity during the audit process. The regulations
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different perspectives. The first addresses the conditions that made possible‚ and eventually stimulated‚ the existence of the accounting fraud perpetrated from the company top management. The second one is about the issue of gaps in the company’s control framework‚ which failed miserably in identify and properly address the problems in company financial statements. Analyzing the first aspect listed above‚ seems that Satyam scandal originated‚ in first place‚ due to a lack of moral and ethical standards
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operation and safeguard of the company assets. We will examine the nature of the Parmalat accounting fraud‚ the process leading to the identification of the fraud‚ the external and internal responses to the fraud and finally‚ a discussion in which the Parmalat scandal could have been prevented if certain independent controls and mandatory regulations were in place. Nature and Context of the Parmalat Fraud The setup of the Parmalat group was a typical complex structure of a centralized‚ few shareholders
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Firms Regulatory Costs: The Case of the Sarbanes-Oxley Act By James A. Millar and B. Wade Bowen The article first begins with an introduction of how and why the Sarbanes-Oxley Act of 2002 (SOX) came about as a result of large scandals such as Enron and Tyco. Many companies believed that the costs of these new regulations exceeded the benefits‚ which is found prevalent with the addition of section 404 which required an auditor’s opinion on annual financial reports. In particular‚ the article
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condone the illegal actions of the company. According to Section 404 of SOX the auditor must attest to the publically traded company effective management of the internal control of issuers for financial reporting. Section 404 requires the auditor to attest to through a report on the management’s assessment of its own internal controls. This is interesting because it sets up two levels of accountability and transparency and holds both the management of the company and the outside auditor accountable
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Sarbanes – Oxley: Where Information Technology‚ Finance‚ and Ethics Meet The Sarbanes – Oxley Act (SOX) of 2002 was enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices by organizations. One primary component of the Sarbanes-Oxley Act is the dentition of which records are to be stored and for how long. For this reason‚ the legislation not only affects financial departments‚ but
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GE: How Much Are Auditors Paid? 1. Requirements of Sarbanes-Oxley related to nonaudit services such as the design and implementation of financial information system and internal audit affect perceptions of the auditors’ independence for two reasons. The first is because of the potential conflict between these services and the audit work which affect the independent of the auditor. Second‚ because these services increase the revenue of the accounting firm from one client‚ which can make the client
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outside auditors who review the accuracy of corporate financial statements‚ and increased the oversight role of boards of directors.[1] The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron‚ Tyco International‚Adelphia‚ Peregrine Systems and WorldCom. These scandals‚ which cost investors billions of dollars when the share prices of affected companies collapsed‚ shook public confidence in the nation’s securities markets. The act contains
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passed‚ the advantages and disadvantages of the Act and the effect of the Act on the future of the Accounting profession. In the end I shall state my personal opinion about the Act. Between December 2001 and July 2002‚ four major US corporationsEnron‚ Global Crossing‚ Adelphia and WorldCom filed for bankruptcysix of the largest corporate bankruptcies in U.S. history (Recine 1535). These companies had hidden their true financial health from creditors and shareholders until an inability to meet
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