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Sarbanes

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The Sarbanes-Oxley Act of 2002 was a law signed in by President Bush. This act applies in general to publicly held companies and the firms that perform the audits on them. The act affects the accounting profession particularly. This act doesn’t just apply to the large accounting firms but any CPA that is working as an auditor of or for any publically traded company in the US. The first implication that this act puts into place is the Public Company Accounting Oversight Board also referred to as “The Board”. The PCAOB is a private sector and non-profit organization that was created by the Sarbanes-Oxley Act of 2002. The PCAOB was put together to oversee auditors and essentially protect the interests of US investors. But also is in place to further the public interest in the preparation of informative, independent, and fair audit reports. With the Sarbanes-Oxley Act of 2002 the rules for auditing a public company have changed slightly. There is now a need for a company to have a separate committee that oversees the company’s audits, within this committee there is to be no management from the company. The auditors for the committee must have their actions approved by the committee before any services exchange hands. With some exceptions of the services not banned, if preapproved by the committee, then the auditor can go through and exchange services with the company. Upon the committee the members must be on the board of directors and also be independent. In terms of being independent, no members can be a part of the management team and also can’t perform and consulting or professional services for the firm. It’s also a good idea to have a member with financial expertise, though these can be defined by the member’s education and background. After the auditor audits there company he/she must report any new information that they come across during the...

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