What is the impact of the Sarbanes-Oxley Act of 2002 (SOX) on public companies and public accounting firms?
What will be an ideal response?
SOX requires public companies registered with the SEC and their auditors to annually assess and report on the design and effectiveness of internal control over financial reporting.
SOX also established the Public Company Accounting Oversight Board (PCAOB) to provide independent oversight of public accounting firms. The PCAOB issues auditing standards and oversees quality controls of public accounting firms.
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A credit sale is made to a customer, even though the customer's account is four months overdue. Describe a specific internal control procedure that would prevent this from happening
The shareholders' equity section of the balance sheet reports the sources of financing provided by preferred and common shareholders and their claims on the net assets of the firm. Which of the following is/are true?
a. The equity of the preferred shareholders usually approximates the liquidation value of the preferred shares. b. The equity of the preferred shareholders equals the sum of the amounts appearing in the Preferred Stock, Additional Paid-In Capital, Retained Earnings, Accumulated Other Comprehensive Income, Treasury Stock, and other preferred shares equity accounts. c. The equity of the preferred shareholders equals the sum of the amounts appearing in the Preferred Stock, Additional Paid-In Capital, and Retained Earnings accounts, only. d. The equity of the preferred shareholders equals the sum of the amounts appearing in the Preferred Stock and Additional Paid-In Capital accounts, only. e. The equity of the preferred shareholders equals the amounts appearing in the Preferred Stock account, only.
What is one of the main criticisms of ‘Strategic Contingencies Theory’ identified in your textbook?
a. It explains very little that is useful in understanding power b. It ignores that sub-units are all interdependent so none can be more powerful than others c. It relies on the assumption that organizational configurations are simple, tightly regulated, bureaucracies d. Both a and c
Stella bought a new refrigerator from Sears and wrote a personal cheque for it for $1,800. Stella knew that there was only $500 in her bank account when she wrote the cheque, but she needed the refrigerator right now
Stella thought if she got a new job soon she would pay Sear the money she owed. Sears could A) successfully sue Stella for negligence B) successfully sue Stella for nuisance C) successfully sue Stella for trespass to goods D) successfully sue Stella for conversion E) not successfully sue Stella as she did plan to pay if she got a new job soon