Study Of The Sarbanes Oxley Act Of 2002 Section 404

Author : Barry Leonard
Publisher : DIANE Publishing
ISBN 13 : 1437924549
Total Pages : 139 pages
Book Rating : 4.41/5 ( download)

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Download or read book Study of the Sarbanes-Oxley Act of 2002 Section 404 written by Barry Leonard and published by DIANE Publishing. This book was released on 2011-05 with total page 139 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Public Co. Accounting Reform and Investor Protection Act, otherwise known as the Sarbanes-Oxley Act, was enacted in July 2002 after a series of high-profile corp. scandals involving Enron and Worldcom. Section 404(a) of the Act requires management to assess and report on the effectiveness of internal control over financial reporting. It also requires that an independent auditor attest to management¿s assessment of the effectiveness of those controls. Efforts to reduce the costs while retaining the effectiveness of compliance resulted in a series of reforms in 2007. This report presents an analysis of data from publicly traded co. collected from a survey of financial exec. of co. with Section 404 experience. Charts. This is a print on demand report.

Author : Office of Economic Analysis
Publisher :
ISBN 13 : 9781466299924
Total Pages : 140 pages
Book Rating : 4.24/5 ( download)

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Download or read book Study of the Sarbanes-Oxley Act of 2002 Section 404 written by Office of Economic Analysis and published by . This book was released on 2009-09-01 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Public Company Accounting Reform and Investor Protection Act, otherwise known as the Sarbanes-Oxley Act (the "Act"), was enacted in July 2002 after a series of high-profile corporate scandals involving companies such as Enron and Worldcom. Section 404(a) of the Act requires management to assess and report on the effectiveness of internal control over financial reporting ("ICFR"). Section 404(b) requires that an independent auditor attest to management's assessment of the effectiveness of those internal controls. Because the cost of complying with the requirements of Section 404 of the Act ("Section 404") has been generally viewed as being unexpectedly high,1 efforts to reduce the costs while retaining the effectiveness of compliance resulted in a series of reforms in 2007. This report presents an analysis of data from publicly traded companies collected from an SEC-sponsored Web survey of financial executives of companies with Section 404 experience conducted during December 2008 and January 2009. The analysis of the survey data is designed to inform the Commission and other interested parties as to whether changes occurring since 2007 are having the intended effect of facilitating more cost-effective internal controls evaluations and audits, especially as they may apply to smaller reporting companies. The findings of the analysis relating to efficiency include evidence on the total and component compliance costs, the changes in costs over time, and the factors that help to explain why costs are lower or higher for some companies than for others. These findings include evidence of direct and indirect effects that management ascribes to Section 404 compliance, including evidence on intended benefits. The 2007 reforms that are the focus of this inquiry include the SEC's June 2007 Management Guidance and its order approving the Public Company Accounting Oversight Board's (PCAOB) Accounting Standard No. 5 (AS5) (collectively referred to as the "2007 reforms"). We are primarily interested in whether and how companies' experience with Section 404(b) compliance changed following the reforms, yet this report also presents evidence on the implementation of both Section 404(a) and Section 404(b). This reflects the interrelationship between the two requirements.

Author : Stephen M. Bainbridge
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.67/5 ( download)

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Download or read book Sarbanes-Oxley § 404 at Twenty written by Stephen M. Bainbridge and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Section 404 of the Sarbanes-Oxley Act of 2002 (SOX) was intended to improve public company internal controls over financial reporting (ICFR). Faulty internal controls were believed to have contributed to many corporate scandals during the dot-com era. Empirical research of the pre-SOX era suggested that reporting companies with poor internal controls tended to have more frequent earnings restatements, more SEC enforcement proceedings, and poorer performance than comparable firms with strong internal controls. When SOX was adopted § 404 was not among the most controversial provisions. Instead, it was the attorney conduct rules, CEO and CFO certification requirements, and the ban on loans to officers and directors--plus the larger question of federalizing corporate governance--that generated most of the early criticism aimed at the statute. Once companies began implementing § 404's mandate for assessments of their internal controls over financial reporting, however, it became apparent that compliance costs were considerably greater than anticipated. In short order, § 404 became--and remains--SOX's most controversial provision. SOX's twentieth anniversary seems an opportune time to reassess the controversy over § 404. There is a considerable body of empirical evidence on the costs and benefits of § 404, which this article reviews. As it turns out, however, there are so many potential confounding factors that all of the evidence must be viewed with a degree of skepticism. Nonetheless, a few conclusions can be drawn. With the benefit of hindsight, it seems clear that Congress in 2002 had no idea what it would cost companies to comply § 404. The SEC had an estimate of what § 404(a) compliance would cost but had no idea what § 404(b) compliance would cost. Sticker shock seems the right description of the reaction once those costs became clear. Section 404 compliance costs were substantial from the outset. Those costs were disproportionately borne by smaller firms from the outset. Section 404 compliance costs remain high and show no signs of dropping over time. It remains the case that those costs are disproportionately borne by smaller firms. As far as achieving its main goal of reducing material weaknesses in ICFR, § 404 cannot be deemed a success. Both adverse managerial reports and auditor attestations actually rose prior to 2014 and have dropped only slightly in the subsequent period. Problems with firms failing to remediate persistent material weaknesses remain a source of concern.

Author : Michael J. Ramos
Publisher : John Wiley & Sons
ISBN 13 : 0470259221
Total Pages : 282 pages
Book Rating : 4.21/5 ( download)

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Download or read book How to Comply with Sarbanes-Oxley Section 404 written by Michael J. Ramos and published by John Wiley & Sons. This book was released on 2008-06-02 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: Now fully revised and updated, the Third Edition of How to Comply with Sarbanes-Oxley Section 404: Assessing the Effectiveness of Internal Control is the perfect starting point for companies with no previous SOX experience. Packed with practice aids including forms, checklists, illustrations, diagrams, and tables, the new edition leads auditing professionals through every step of the audit processes associated with Section 404 compliance.

Author : Kanalis Ockree
Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.43/5 ( download)

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Download or read book Section 404 of Sarbanes-Oxley Act written by Kanalis Ockree and published by . This book was released on 2008 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exhaustive research has been done on the effects of the Sarbanes-Oxley Act (SOX) since its passage in July 2002. Researchers such as Rittenberg and Miller (Rittenberg, 2005) found improvements in information technology controls and anti-fraud processes. Wagner and Dittmar (Wagner, 2006) found extensive SOX benefits related to improvements in internal control from reduced human error and improved documentation. This paper adds to the body of prior research by identifying and analyuzing collateral internal and external reactions to material weaknesses reported following SOX. Specifically the authors identify and analyze five external outcomes and four internal responses related to companies which have reported material weaknesses in internal control pursuant to SOX. These external measures are: 1) Changesin corporate mortality. Specifically, did the company go out of business, delust, or disappear via merger/acquisition following announcement of a material weaknesses in internal control. 2) Change in risk related to stock ownership in companies reporting material weaknesses in interal control as measured by the stock's Beta coefficient. 3) Level of institutional ownership of company stock in companies reporting material weaknesses in internal control.

Author : Norman Marks
Publisher :
ISBN 13 : 9781634540070
Total Pages : pages
Book Rating : 4.77/5 ( download)

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Download or read book Management's Guide to Sarbanes-Oxley Section 404 written by Norman Marks and published by . This book was released on 2017-09-28 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Matthew Leitch
Publisher : CRC Press
ISBN 13 : 131711485X
Total Pages : 271 pages
Book Rating : 4.57/5 ( download)

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Download or read book Intelligent Internal Control and Risk Management written by Matthew Leitch and published by CRC Press. This book was released on 2016-05-23 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many people in organizations resent internal control and risk management; these two processes representing unwelcome tasks to be completed for the benefit of auditors and regulators. Over the last few years this perception has been heightened by the disastrous implementation of section 404 of the Sarbanes-Oxley Act of 2002, which is generally regarded as having been too expensive for the benefits it has brought. This important book offers a way of improving this prevailing perception and increasing the value of control and risk management by bringing creativity and design skills to the fore. The value of risk and control activities is often limited by the value of the control ideas available and so Matthew Leitch provides an arsenal of 60 high performance control mechanisms. These include several alternative ways to design controls and control systems, as well as providing controls for monitoring and audit, controls for accelerated learning, and techniques for finding and recovering cash. This design material is combined with insights into the psychology of risk control, strategies for encouraging helpful behaviour and enabling change, and a surprisingly simple integration of internal control with risk management. The book is realistic, practical, original, and easier reading than most in the field. The material is not specific to any one country and has international appeal for internal auditors and all those concerned with risk management, corporate governance and security.

Author : Susan M. Gates
Publisher : Rand Corporation
ISBN 13 : 0833043951
Total Pages : 369 pages
Book Rating : 4.55/5 ( download)

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Download or read book In the Name of Entrepreneurship? written by Susan M. Gates and published by Rand Corporation. This book was released on 2007-11-21 with total page 369 pages. Available in PDF, EPUB and Kindle. Book excerpt: What are the differential effects of regulation and policy on small businesses? What is the impact of special regulatory treatment for small businesses? This book sheds light on these issues through analysis of the regulatory and public policy environment with regard to small businesses, including focused studies in four key areas: health insurance, workplace safety, corporate governance, and business organization.

Author : F. Lessambo
Publisher : Springer
ISBN 13 : 1137360011
Total Pages : 476 pages
Book Rating : 4.14/5 ( download)

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Download or read book The International Corporate Governance System written by F. Lessambo and published by Springer. This book was released on 2016-01-26 with total page 476 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive approach to Corporate Governance, Audit Process and Risk Management. Furthermore, it provides an analytical and comprehensive approach of the issues facing governance directors, internal and external auditors, risk managers, and public officials conducting assessments based upon the Report on Standards and Codes.

Author : Weili Ge
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.17/5 ( download)

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Download or read book Benefits and Costs of Sarbanes-Oxley Section 404(B) Exemption written by Weili Ge and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Thousands of publicly traded U.S. firms are exempt from auditor oversight of internal control effectiveness disclosures (Section 404(b) of the Sarbanes-Oxley Act of 2002). We provide initial estimates of the measurable benefits and costs of this exemption. We measure the benefit of exemption with audit fee savings, which we estimate to be an aggregate $388 million from 2007 through 2014 for our sample of exempt firms. The key concern of exemption is internal control misreporting (IC misreporting; i.e., firms with ineffective internal controls erroneously disclosing effective internal controls). We estimate that 9.3 percent of exempt firms are IC misreporters, and that 404(b) compliance would lower this IC misreporting to 5.8 percent. IC misreporting imposes at least two measurable costs on current and prospective shareholders: lower operating performance due to non-remediation, and market values that fail to reflect a firm's underlying internal control status. We calculate the cost of 404(b) exemption from 2007 through 2014 to be an aggregate $719 million in lower future earnings due to non-remediation, and a $935 million delay in aggregate market value decline due to the failure to disclose ineffective internal controls. Although the measurable costs of exemption exceed the measurable benefits, the audit fee savings benefit shareholders of all exempt firms, whereas costs are borne by shareholders of only a fraction of exempt firms (the IC misreporters). In addition to providing initial evidence on measurable benefits and costs of internal control disclosure regulation, our study provides a tool for identifying the firms most at risk of inaccurately disclosing internal control effectiveness.