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Integrity in Financial Reporting

"Some crooked top management companies are tempted to falsify their financial information in order to look better than they are. Therefore it is essential for financial reporting to have integrity. This makes the integrity of financial reporting a fiduciary duty and an ethical issue".

The Sarbanes-Oxley Act (SOX) was signed into law in July 2002 and was designed to improve the accuracy of publicly held companies' financial statements. How would this Act affect:
1. The Audit committees of public company boards of directors
2. The CEO's and CFO's of the public companies.

Solution Preview

(1) The Sarbanes-Oxley Act (SOX) affected audit committees in a few different ways. SOX actually changed the auditing environment in significant ways. Greater accountability was mandated, with an emphasis on internal controls. Not only does management have to document a solid internal control environment and each of the main elements that make up that environment, but SOX also requires that the auditor ...

Solution Summary

This solution explains how the Sarbanes-Oxley Act affects the audit committees of public company board of directors and the CEO's and CFO's of the public companies. Includes 1 reference.