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Sarbanes-Oxley News & Developments
Experts Split On Costs And Benefits Of The PCAOB Proposed Audit StandardThe PCAOB proposed audit standard has triggered diverse reactions.
> > The PCAOB recently proposed what senior PCAOB staff have called an "integrated" 135-page audit standard on auditors audits of public companies financial statements and auditors evaluations of corporate managers reports on their companies internal controls.
Section 404 of the Sarbanes-Oxley Act requires management of public companies to perform an annual assessment of the effectiveness of their companies internal controls over financial reporting and to report the results of that assessment in their companies annual shareholder reports. Sections 103 and 404 of Sarbanes-Oxley give the board the duty to establish professional standards governing independent auditor required attestation on management reports on internal controls.
One key issue debated by representatives from public companies, accounting firms, investor groups, and regulatory organizations since Section 404 became law has been how auditors should delve into company internal controls to provide the auditor attestation required by Section 404.
As reflected in comment letters received by the PCAOB, some members of the accounting community want auditors to dig deeper into companies internal controls, while others want auditors to rely more on management assessment, thereby cutting audit-related costs.
Source: Securities Law Daily
Published:2004-01-22
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