The article being reviewed is called, ?Sarbanes-Oxley: Beyond Public Companies? written by William H. Wiersema. Investors in the Stock Market rely on pecuniary information issued by public companies for investment decisions. In nightclub to protect the investors Congress passed the Sarbenes-Oxley mold in 2002. Investors need trade protection and the Act regulates many areas of corporate governance, which among other things requires top counsel to assume a higher level of formal function. consort to the article, management cannot absolve themselves of the responsibility for the companys financial information. circumspection must in any case establish a system of checks and balances by introducing independent failies into corporate governance. The Act also requires a great emphasis on preventing fraud. Keeping companies ethical benefits the stakeholders.
The Act whitethorn create a new standard of internal controls applicable to all corporations, even in absence of legislation. The Act provided specifies that regulators and legislators in each state should determine how to apply the rules to offstage companies locally. Sarbenes-Oxley has broadened the role of auditors. While internal control has always been part of auditing, the new specific reporting requirements take things much further. In addition to an audit report, a report on a companys system of internal control is now also required. The Act established the Public Company Accounting vigilance placard.
An essential element of the Act is the independence of the accounting mansion providing audit services. In addition to requiring the accounting firms to maintain independence, the Act requires public companies to keep its Board of Directors, and the Audit Committee of the Board of Directors independent as well. The Audit Committee must include an independent financial expert, to assure that the Board has adequate discernment to be able perform related functions. Personal responsibility of company officers and directors is also emphasized, as they were perceived...
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