The Sabarnes-Oxley Act and PCAOB Essay - 727 Words

PCAOB inspects registered public accounting firms to assess compliance with the Sarbanes -Oxley Act , the rules of the Board, the rules of the Securities and Exchange Commission , and professional standards in relation to the performance of the firm , issuance of audit reports, and related matters other issuers , brokers and dealers . The Act requires the Board to carry out these inspections annually to companies that regularly provide audit reports for more than 100 issuers and at least every three years for companies that regularly provide audit reports for 100 or less emitters . As required by law, the PCAOB prepares a written report of each inspection and provides , in detail appropriate for the SEC and certain state regulatory†¦show more content†¦The firm’s failure to take due care with regards to goodwill for impairment ,reduction in issuer’s revenue estimate and liquidity issues to evaluate the effects of these events on its assessment of the potential impairment of goodwill. The firm failed to obtain adequate competent evidential matter to support its audit opinion with regards to carrying out audit procedures to test the valuation of issuer’s primary assets. Specifically, it has failed to obtain support for some of the assumptions that it used when developing an estimate of the fair value of inventory. The Firm failed to perform sufficient audit procedures to assess the issuer claim that losses related to securities of the issuer of certain joint venture obligations were not likely, since the signing procedures were limited to management research. The firm also failed to test a significant process that the issuer used as its mechanism to identify impaired inventory and investments because the company failed to prove any significant information used and produced by this process. The Firm did not take due care and show professional scepticism while performing audit procedures pertaining to a sale of a subsidiary of a newly formed entity in which the issuer held a property interest. Specifically, the firm failed to establish the percentage of the issuer of property sold, the suitability of certain adjustments to the costShow MoreRelatedThe Sarbanes Oxley Act ( Act ) Essay1660 Words   |  7 PagesSarbanes Oxley Act The Sarbanes-Oxley Act, is an act passed by U.S. Congress on July 30, 2002. The primary reason was to protect investors from the possibility of fraudulent accounting activities by corporations. The act is commonly known as SOX Act. The act is named after its cosponsors, U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. It mandates strict reforms to improve financial disclosures from corporations and prevent accounting fraud. The Sarbanes Oxley Act is arranged