Sarbanes - Oxley Act , 2002

The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and financial regulations for public companies.

Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices. Auditors, accountants and corporate officers became accountable for the new set of rules. These rules were amendments and additions to several laws enforced by the Securities and Exchange Commission (SEC), including the Securities and Exchange Act of 1934 and the Investment Advisers Act of 1940. The SEC enforces the Sarbanes-Oxley Act. The main areas that the Act is focused on are:

Increasing criminal punishment
Accounting regulation
New protections
Corporate responsibility

The Act primarily sought to regulate financial reporting, internal audits and other business practices at publicly traded companies. However, some provisions apply to all enterprises, including private companies and nonprofit organizations.

Additionally, the Act established penalties for noncompliance with its provisions. Compliance with the Act is about financial disclosure and corporate governance.

Major provisions and further----

https://corporatefinanceinstitute.com/resources/knowledge/other/sarbanes-oxley-act/

Comments

Financial statements & analysis

Financial statements & analysis Financial statements are written records that convey the business activities and the financial performance of a company. The financial statements are used by investors, market analysts, and creditors to evaluate a company's financial health and earnings potential. The three major financial statement reports are the Balance sheet Income statement Cash flow statement Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. Sources of financial information To effectively evaluate the financial performance of the business requires financial information from three sources: a balance sheet, an income statement and a cash flow statement. Balance Sheet A balance sheet is a statement of assets, liabilities, and capital of a business or an organization at a particular point in time, detailing the balance of income and expenditure ov...

Difference between Vouching , Verification and Valuation

Difference between Vouching , Verification and Valuation Vouching Verification Valuation Meaning Vouching is a process of comparing the entries in the books of accounts with the bonafide vouchers Verification is a process which proves the existence, ownership and title to the assets Valuation is a process which certifies the correct value of the assets and liabilities at the date of balance sheet. Subject Matter Vouching is made of the entries recorded in the books of original entry and their posting in the ledger Verification on the other hand is made of assets and liabilities appearing in the balance sheet at the end of the year Valuation is also made of assets and liabilities appearing in the balance sheet at the end of the year By whom Vouching is done by the senior auditor and audit clerks. Verification on the other hand is done by the auditor himself or his associates Verification on the other hand is done by the auditor himself or his associates When Vouching is done...

Elements of audit report

1. Title of the report The title of the audit report should help the reader to identify the report. It should disclose the name of the client. The title distinguishes the audit report from other reports. 2. Name of the Addressee The addressee normally refers to the person who appoints the auditor. If a company appoints the auditor, the addressee should be shareholders. As per law, the complete address of the addressee is required. Addressee for the statutory audit shall be shareholders and in case of Special Audit, it is Central Government. 3. Introductory Paragraph The introductory paragraph should specify that it is the auditor’s opinion on financial statements audited by him. The period covered by financial statements should be stated with exact dates. 4. Scope This part should include the matter-of-fact relating to the manner in which the audit examination was made. The audit examination should cover the company's accounts, Profit and Loss Account, Balance Sheet and Cash Flow S...

Wocop

Search This Blog