Financial-Sarbanes & Oxley Flashcards
1
Q
Sarbanes & Oxley – Background
A
- Came about due to marked failures of Enron, WorldCom, Adelphia, and HealthSouth. Congress concluded corrective action needed to be taken
- In 2002, a US law was passed
- Aimed to restore public trust in the accounting processes of public traded companies
- Increased penalties and encouraged ethical and social responsibility
2
Q
By who was created Sarbanes & Oxley law?
A
By Senator Paul Sarbanes and US Representative Michael Oxley
3
Q
Sarbanes & Oxley –Requirements
A
- SOX 302
- SOX 404
4
Q
Sarbanes & Oxley –Requirements
SOX 302:
A
SOX 302:
Requires the CEO and CFO to certify that SEC disclosures, financial statements, and all supplemental disclosures are truthful and reliable and that management has taken appropriate steps to ensure that controls are in place that are capable of consistently producing financial information stakeholders can rely upon.
5
Q
Sarbanes & Oxley –Requirements
SOX 404:
A
- Requires a company’s external auditors to report on the reliability of management’s assessment of internal controls
- External auditors must provide an opinion on the reliability and assessment developed by management.
6
Q
Sarbanes & Oxley –Features
A
- Protect the investor
- Avoid the risk of share price slide
- Improve the control environment and productivity of the financial function.
- Increased penalties and encouraged ethical and social responsibility
7
Q
Who is SLB External auditor?
A
PwC.- PricewaterouseCoopers
