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Sarbanes Oxley Act

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How the Sarbanes Oxley act affected the audit industry
The government change in policy that has the biggest influence on my career choice has to be the Sarbanes Oley act of 2002. This act is what influenced my decision not be an auditor in a big six firm or smaller accounting firm, this change in law is why I choose to go into the private company accounting route. First let me start off by informing you want the Sarbanes – Oxley act is, it is a government act that changed the old SAS no. 59 as a result of the Enron and World Com financial collapses (Ryu 2009). The law was enacted to enhance the standards for all US based public companies financial reporting, this happened as a result of the Enron and World Com financial collapses (Elson 2008). This law was designed to help create auditor independence, so financial reports that are relied upon from prospective shareholders and lenders are accurate.(Li-ying 2011). The law, as I have said was enacted as a knee jerk reaction to the Enron collapse, it was discovered that Arthur Anderson the accounting firm for Enron was both their internal and external auditors. The two companies were so comingled it was hard to differentiate which employee worked for who, both the CEO and CFO both had previously worked for Arthur Anderson (Ryu, 2009). The law which is known as SOX changed how responsible auditors were for the opinions they gave on the financial reports they audited. The outside public depended on these reports to make financial decisions, and determine the financial health of any entity. This law changed the auditor’s liability; it now requires that auditors have a detailed knowledge of the internal controls in each audit that an opinion is given on. SOX requires management certification, adequate disclosures, management responsibility to maintain financial documents, and auditors and managements responsibly to

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