Wiley CIAexcel Exam Review 2014 Focus Notes: Part 3, Internal Audit Knowledge Elements

Appendix: Sarbanes-Oxley Act of 2002

The U.S. Sarbanes-Oxley Act of 2002 (SOX Act) contains provisions affecting the corporate governance, auditing, and financial reporting of public companies, including provisions intended to deter and punish corporate accounting fraud and corruption. The SOX Act generally applies to those public companies required to file reports with Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1933 and the Securities Exchange Act of 1934 and registered accounting firms. This appendix contains only the SOX Act titles and sections that are of interest to internal auditors. Visit www.pcaobus.org or www.aicpa.org for SOX.

Title II of the Act addresses auditor independence. It prohibits the registered external auditor of a public company from providing certain non-audit services to that public company audit client. Title II also specifies communication that is required between auditors and the public company’s audit committee (or board of directors) and requires periodic rotation of the audit partners managing a public company’s audits.

Titles III and IV of the Act focus on corporate responsibility and enhanced financial disclosures. Title III addresses listed company audit committees, including responsibilities and independence, and corporate responsibilities for financial reports, including certifications by corporate officers in annual and quarterly reports, among other provisions. Title IV addresses disclosures in financial reporting ...