What does it mean to say that the concept of risk exposure may be the key to making SOX sections 302 and 404 more effective?
What will be an ideal response?
As some critics of SOX have suggested, it is unrealistic to expect a company to regularly report on the minutia of its internal controls over financial reporting, because of the cost and labor involved. If, instead, a company concentrates on those internal control areas where lapses in internal control have the greatest potential to result in material misstatement of the company's financial reports, then the goals of SOX could perhaps be achieved at a much more tolerable level of cost and effort.
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