Textbook/Essay
1) Sunnyvale Electrical. sells electrical parts to electrical contractors in the
southeastern United States. Sunnyvale Electrical customers mail their payments—
attached to the stub (i.e., remittance advice [RA]) from their monthly statement—to
Sunnyvale Electrical accounts receivable (AR) office.
2) An AR clerk confirms that the check amount agrees with the amount on the RA and
sends the checks to the cashier.
3) The AR clerk prepares batch totals of the customer numbers, invoice numbers, and
amount paid.
4) The AR clerk then enters the batch totals and RAs into the computer, where the AR
master data are updated to record the payment.
5) The computer reconciles the batch totals, confirms job completion, and reports
discrepancies, if any, to the AR clerk.
Problem 1 prepare a table of entities and activities.
Entities Para Activities
Customer 1 1. Mail check with sub
to AR department
AR Department/AR Clerk 2 ,3,4 2. Cross check the
remittance amount
with check amount
3. Receive checks from
customers.
4. Send Checks to
cashiers
5. Prepares batch totals
of customers numbers,
invoice number, and
amount paid.
6. Enter batch totals and
remittance advice in
computer
Computer 4, 5 7. Updates AR Master
data
8. Reconciliation and
notification to AR
Cashier 5 Receive Batch checks from
AR clerk
Problem 2 draw a context diagram.
Problem 5
One of the clauses in Section 409 states, "Shall disclose to the public on a rapid and current basis
such additional information concerning material changes in the financial condition or
operations". "Rapid" and "current" describe actions that happen fast and are expressed in the
present tense. Conversely, real time refers to the exact instant that a process or event occurs. All
of these definitions concur that Section 409 of the Sarbanes–Oxley Act of 2002 supports real-
time financial reporting. (SoxLaw & SoxLaw, 2023)
"SOX requirements are designed to help companies avoid financial reporting errors, prevent
fraud, and provide transparency in reporting." (Lynnemurray, 2021). In order to end fraudulent
auditing and accounting practices and restore the profession's reputation as a reliable source of
information for users, the Sarbanes-Oxley Act of 2002 was put into effect. In order to end
fraudulent auditing and accounting practices and restore the profession's reputation as a reliable
source of information for users, the Sarbanes-Oxley Act of 2002 was put into effect. By "creating
separate auditing standards and regulation requirements for audits of public and non-nonpublic
entities," the act "created governmental oversight for auditors of public companies, while still
allowing the accounting profession to continue being self-regulating on audits of non-public
entities." (Basile, Handy, & Fret, 2015 p. 585).
The Sarbanes-Oxley Act of 2002 provides the public with reliable financial information so they
can make informed judgments. However, Sarbanes-Oxley heightened the responsibility of top
executives for the accuracy of their companies' financial statements and aimed to reduce
corporate wrongdoing and enhance corporate transparency (Pozner et al., 2018). It permits the
company to assume accountability for its financial reporting.
Reference:
Basile, A., Handy, S., & Fret, F. N. (2015). A Retrospective Look at the Sarbanes-Oxley Act of
2002- Has it accomplished its original purpose?Journal of Applied Business Research,31(2),
585. https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/scholarly-
journals/retrospective-look-at-sarbanes-oxley-act-2002-has/docview/1699068056/se-2
Lynnemurray. (2021, March 14).ESOX Compliance | Requirements, Controls & Audits | Imperva.
Learning Center.Ehttps://www.imperva.com/learn/data-security/sarbanes-oxley-act-sox/
#:~:text=SOX%20security%20controls%20are%20measures,financial%20reporting
%20or%20financial%20results.
Pozner, J., Mohliver, A., & Moore, C. (2018). Shine a light: How firm responses to announcing
earnings restatements changed after Sarbanes–Oxley.EJournal of Business Ethics,E160(2),
427–443.Ehttps://doi.org/10.1007/s10551-018-3950-y
SoxLaw, & SoxLaw. (2023, July 3).EThe Sarbanes-Oxley (SOX) Act of 2002 | Information &
Resources - SoxLaw. SoxLaw.Ehttps://www.soxlaw.com/
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