Why SOX and PCAOB came into existence Essay Example | Topics and Well Written Essays - 500 words

Why SOX and PCAOB came into existence - Essay Example Apart from this, it needs that management evaluates the efficiency of internal control over financial reporting. Additionally, it requires independent auditor attest to, and report on management assessment of the internal controls. According to Northrup (2009), there are several implications of SOX on the accounting profession. One of the implications is that auditors of public companies are required to issue three opinions; an opinion on management’s assessment of internal controls over financial reporting, a view on whether the financial statements are presented fairly and their own appraisal about the efficiency of internal controls over financial reporting. The main intension of SOX is to protect investors by improving reliability and accuracy of corporate disclosure that are made pursuant to the security rules, and for other reasons. Objective of PCAOB is to oversee the auditors of governmental organizations and companies so as to protect the interest of the preparation of informative, independent and fair audit reports. Moeller (2008) asserts that the rules inflicted on the accounting occupation by the Public Company Accounting Oversight Board (PCAOB) require sovereign auditor to evaluate the efficiency of the internal controls over financial reporting by the use of a method of recognition. It releases Audit Standard No. 2 which describes internal controls over financial reporting, and management responsibilities which are being set out. This audit standard emphasize on the importance of the Environment control and Anti-Fraud Programs and Controls in assessing internal control over financial reporting. The PCAOB develop some issues which are related to the registration and reporting of public accounting firms, inspections, professional standards, investigations and adjudications. SOX and PCAOB have recognized the significance of the assessment of the Control Environment and Anti-Fraud Programs and control to the