Swa chp 47 Research Paper Example | Topics and Well Written Essays - 750 words

Swa chp 47 - Research Paper Example ment of appropriate tools to combat corporate fraud, penalize corporate offenders, and dissuade corporate deception making use of threat of stiffer penalties. The Act minimizes the risk of losses incurred by investors in case of fraud and theft. Additionally, the act encourages fraud reporting by setting aside benefit of reliable financial reporting, transparency, and answerability. Generally, the SOX Act addresses the issue of regulation for public companies and their auditors who are required to confirm organization reports on the efficiency of internal financial control as provided by Section 404. The Act’s aim was to help companies audit their accounts (Protiviti 22-30). Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs) of businesses and accounting firms must verify that company accounts and other financial statements are a true representation of the firms or businesses financial situation. Additionally, the firms and business managements must acknowledge annually that they are accountable of the company’s financial control and that the internal systems involved in company financial control are operational accounts. Additionally, the firms and business must ensure that all the departments fully document every practice that impacts on the financial processes of the organization. Furthermore, the organizations must ensure that all the possible risks of occurrence of fraud or financial mismanagement are identified and that relevant controls to counteract such risks are put in place. The Act holds the company CEOs and CFOs personally responsible for all the information comprised in their firms or business financial statements and systems of internal financial regulator accounts. Section 201 made it illegal for public accounting firms to deliver definite audit services to audit clients. However, the public accounting firms are free to provide other non-audit services if they are but they must be pre-approved by the audit committee. The