The basic requirements of SOX are as follows….”1. oversee the audit of public companies
that are subject to the securities laws, 2. Establish audit report standards and rules, and 3.
Inspect, investigate, and enforce compliance on the part of registered public accounting
firms, their associated persons, and certified public accountants.”
The ramification of section 404 requires “that management of public companies assess the
effectiveness of the internal controls of issuers for financial reporting and a publicly-held
company’s auditor to attest to, and report on, management’s assessment of its internal
controls.”
I chose Effectiveness in Preventing Fraud. According to Tracy Coenen, who is a CPA and
performs fraud examinations and financial investigations for her company, in her article
in allBusiness, “companies have not radically changed their fraud prevention policies and
procedures.” The SOX act only created paperwork for companies to adhere to but all that
paperwork doesn’t prevent fraud. In the governments haste to come up with a solution,
they only required detailed documentation of procedures.
https://www.congress.gov/bill/107th-congress/house-bill/3763
https://us.aicpa.org/advocacy/issues/section404bofsox
https://www.allbusiness.com/has-sarbanes-oxley-really-done-anything-to-curb-fraud-2-
5220240-1.html
