Sarbanes Oxley Act Impacts
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Running head: SARBANES-OXLEY ACT
Sarbanes-Oxley Act
Sarbanes-Oxley Act
Examine an auditing issue that is impacted by Sarbanes-Oxley. One of the auditing issues that were impacted heavily by the Sarbanes-Oxley Act was the issue independence or of what services can and cannot be practiced outside the scope of auditors. “Internal auditors should be independent of the activities they audit. Such independence permits auditors to perform their work feely and objectively. Without independence, the desired results of internal auditing cannot be realized (Simmons, 1995). “
Compare and contrast that issue before and after the Sarbanes-Oxley Act was implemented. The Research Foundation of the Institute of Internal Auditors published a report in 1995. This report studied non-traditional services performed by internal auditors and found that by performing those services auditors were at high risk of jeopardizing independence. One notable case was Anderson LLC, they were at one time one of the five largest auditing partnerships in the world, Anderson, LLC., performed auditing and consulting services for none other than Enron, Anderson, LLC, made more money consulting for Enron than they did performing auditing services. It was in part because of the Enron scandal that the Sarbanes-Oxley Act came to be. Section 201, of the Sarbanes-Oxley Act deals with services outside the scope of practice of auditors. This section prohibits bookkeeping or other services related to the accounting records or financial statements of the audit client; financial information systems design and implementation; appraisal or valuation services, fairness opinions, or contribution-in-kind reports; actuarial services; internal audit outsourcing services; management functions or human resources; broker or dealer, investment adviser, or investment banking services; legal services and expert services unrelated to the audit; and any other service that the Board determines, by regulation, is...
Sarbanes-Oxley Act
Sarbanes-Oxley Act
Examine an auditing issue that is impacted by Sarbanes-Oxley. One of the auditing issues that were impacted heavily by the Sarbanes-Oxley Act was the issue independence or of what services can and cannot be practiced outside the scope of auditors. “Internal auditors should be independent of the activities they audit. Such independence permits auditors to perform their work feely and objectively. Without independence, the desired results of internal auditing cannot be realized (Simmons, 1995). “
Compare and contrast that issue before and after the Sarbanes-Oxley Act was implemented. The Research Foundation of the Institute of Internal Auditors published a report in 1995. This report studied non-traditional services performed by internal auditors and found that by performing those services auditors were at high risk of jeopardizing independence. One notable case was Anderson LLC, they were at one time one of the five largest auditing partnerships in the world, Anderson, LLC., performed auditing and consulting services for none other than Enron, Anderson, LLC, made more money consulting for Enron than they did performing auditing services. It was in part because of the Enron scandal that the Sarbanes-Oxley Act came to be. Section 201, of the Sarbanes-Oxley Act deals with services outside the scope of practice of auditors. This section prohibits bookkeeping or other services related to the accounting records or financial statements of the audit client; financial information systems design and implementation; appraisal or valuation services, fairness opinions, or contribution-in-kind reports; actuarial services; internal audit outsourcing services; management functions or human resources; broker or dealer, investment adviser, or investment banking services; legal services and expert services unrelated to the audit; and any other service that the Board determines, by regulation, is...