COLLEGE ACCOUNTING, CHAPTERS 1-27 2T
22nd Edition
ISBN: 9781305930377
Author: HEINTZ
Publisher: CENGAGE L
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Question
Chapter 7A, Problem 1RQ
To determine
State the requirement of the Sarbanes-Oxley Act under section 404.
Expert Solution & Answer
Explanation of Solution
Sarbanes-Oxley Act of 2002:
- The Sarbanes-Oxley Act (also known as SOX) was introduced in 2002 to restore the investors’ interest in public companies. This act established accounting regulations and norms that most large businesses have to follow.
- This act requires company CEOs and CFOs to assume responsibility for the financial statements and disclosures. They also need to assume responsibility for establishing an adequate internal control structure and procedure for financial reporting.
The requirement of the Sarbanes-Oxley Act under section 404 is explained as follows:
Section 404 of the Sarbanes Oxley Act (SOX) requires the management of the publicly traded companies to have an effective internal control over the financial reporting. It requires auditors of the publicly traded companies to attest and report on the management assessment of its internal control.
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Chapter 7A Solutions
COLLEGE ACCOUNTING, CHAPTERS 1-27 2T
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