The Sarbanes-Oxley Act (SOX) was signed into law on July 30, 2002. It is arguably the most significant corporate reform legislation since the Great Depression. Sarbanes-Oxley mandates requirements, including reporting on internal control over financial reporting. The newly created Public Company Accounting Oversight Board (PCAOB) has the responsibility of establishing standards applicable to audits of internal control over financial reporting.
Navigate to the PCAOB’s website (http://www.pcaobus.org/) to review the full text of SOX and answer the following questions.
Section 404 of SOX requires a public company’s annual report to include an internal control report. What are the two required components of management’s report on internal control?
What obligation does a public company’s independent auditor have relating to internal control over financial reporting under Section 404?
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