![]() ![]() Title I created the PCAOB and tasked them with the regulations, inspection, and oversight of accounting firms that audit public companies.Title I: Public Company Accounting Oversight Board (PCAOB).SOX consists of 11 broad “titles”, each with various sections. The goal of SOX was to restore investor confidence by increasing the oversight responsibilities of corporations and corporate boards, making auditors more independent of their public company clients, minimizing the effects of conflicts of interest, and harshening the penalties for financial misconduct. Lawmakers enacted the Sarbanes-Oxley Act of 2002 (SOX) as a reaction to these financial wrongdoings. You may have heard of them - the most notorious were the Enron, Tyco, and Worldcom scandals. Several accounting scandals shook the world and severely damaged investor confidence in the early 2000s. Although there are many sources of accounts and finance regulations and laws, we’ll discuss two of the primary ones in this article. In accounting, keeping in line with these rules is called compliance. To ensure your financial reporting is accurate, you need to have clear processes and procedures for recording and verifying revenues, expenses, assets, and liabilities. Most of these rules come down to the accurate reporting of financial information. Because of this, there are pages of regulations that companies must follow - or otherwise face penalties. ![]() Money is a prime area in which wrongdoing and misconduct can occur. ![]()
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