• No more than 1400 words
• Specifically evaluate whether SOX will be effective in avoiding future frauds.
• Format consistent with APA guidelines
According to BrainMass rules this is not a hand in ready assignment but only guidance.
Some of the most important aspects of the regulatory environment are now contained in the Sarbanes Oxley Act, 2002. The provisions of SOX apply to public companies in the United States and public auditors. The SOX requires managements to assess the effectiveness of the internal control structure over financial reporting. For example, if there is inadequate separation of responsibilities in cash transactions, the management has to identify the weaknesses and take steps to introduce internal controls. Such actions on the part of the management help eliminate opportunities for fraud. Not only do superior internal controls reduce or eliminate opportunities for fraud but also prevent fraud in future. After the management has made the assessment, the auditors are required to report on management's assessment. The auditor is required to spot weaknesses in internal controls and report on them. This procedure brings to light the weaknesses in internal controls and compels the management to put in place stronger internal controls. For example, if the auditor fined that the sales person who closes the sales also sanctions credit to customers, he brings this weakness to the attention of the management. The management puts in place a stronger internal control. This measure will help reduce the chances of fraud in future. There are new standards for public auditing firms. These standards and rules are far higher than what it was before. For example, SAS 99 requires auditors to actively assess the risk of fraud during their audit and act on the assessment when they carry out the audit. For instance, if the auditor feels that there is a fraud being perpetrated in the accounts receivables. It is the duty of the auditor to act on that assessment and detect the fraud. Similarly, the PCAOB formed for enforcing the Sarbanes Oxley Act 2002 requires that auditors plan for fraud detection at the inception of their audit and implement the plan. The effect of these two requirements is that the public auditors will actively search for frauds leading to material misstatements in the financial statements, and detect the frauds. Not only will these requirements detect frauds now but will help prevent frauds in future.
The SOX also has other measures that help protect the public from fraud. There is a whistleblower provision under which companies must set up a confidential, anonymous reporting mechanism for employees. This is set up through a vendor which ensures that the identity of the caller is not exposed. the effect of having this provision is that information from employees can help identify and eliminate frauds from ...
This solution explains regulatory requirements to protect the public from fraud. The sources used are also included in the solution.
I need help with the following questions please:
1. How have control systems been changed by Sarbanes-Oxley requirements in a hospital organization.
2. Could you please provide an example of how it has effected the managing of hospital documentation.View Full Posting Details