Reference no: EM133267596

Assignment - Sarbanes Oxley Act Discussion

Densflore Saul - Describe the Sarbanes Oxley Act and its impact on internal controls and financial reporting?

Internal control is a procedure for ensuring that an organization's objectives in operational effectiveness and efficiency, accurate financial reporting, and compliance with laws, rules, and policies are met, according to the definitions of accounting and auditing. Internal control is a comprehensive notion that encompasses all aspects of risk management for a company.

Every manager is required to submit a "Internal control report" in accordance with Section 404 of the Act. The report should specify that management is responsible for building and maintaining an effective internal control system, and the structure is set up to allow for internal auditing.

The management should make sure that an accurate evaluation of the operation of the internal control system is conducted at the conclusion of the fiscal year. What adjustments will the management make to the internal control structure in order to improve it? Smaller corporations whose shares are not publicly listed are not subject to the Sarbanes Oxley Act because of its high implementation costs. Each and every manager is required to:

a. Evaluate the internal control system's operational performance and design.

b. Assess the framework used to identify fraud

c. Carry out a fraud risk evaluation

d. Assess the controls over the year-end accounting process.

Amelia Vazquez Cruz - Describe the objectives and elements of internal control

In the definition of accounting and auditing, internal control is the process of ensuring that an organization meets its objectives in terms of operational effectiveness and efficiency, accurate financial reporting, and compliance with laws, regulations, and policies. Controlling risks within an organization is a broad concept that encompasses everything that is involved in controlling those risks. In other words, it is a means of directing, monitoring, and measuring the resources of an organization. It is critical to the detection and prevention of fraud and the protection of the organization's resources, both tangible (e.g., machinery and property), and intangible (e.g., reputation and intellectual property).

An entity's board of directors, management, and other personnel are involved in internal control to provide reasonable assurance that:

Information is reliable, accurate, and timely

Of compliance with applicable laws, regulations, contracts, policies, and procedures

Of the reliability of financial reporting

The purpose of internal controls is to prevent errors and irregularities, identify problems, and ensure that corrective measures are taken.