the ethical compass a toolkit for integrity in business sox challenge

The Ethical CompassA Toolkit for Integrity in Business

SOX Challenge

www.KPMGUniversityConnection.com


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The Ethical CompassA Toolkit for Integrity in Business

The SOX

Challenge

© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 Barbara Porco. Used with Permission. All rights reserved.

The Ethical Compass – SOX Challenge www.KPMGUniversityConnection.com

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Overview

Key Compass Concepts

• Description of the SOX Challenge

• Objectives of SOX Challenge Activity

• Framework for Discussion

• Sarbanes-Oxley Act of 2002

• SOX Challenge Activity



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Overview









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Description of the SOX Challenge

The SOX Challenge is an interactive student activity pertaining to the Sarbanes-Oxley Act of 2002, highlighting the importance of ethical behavior and professional conduct within the

accounting profession.

The SOX Challenge is accompanied by a presentation that will provide a framework for discussion pertaining to the components of the Sarbanes-Oxley Act and the importance

of compliance with the Act.



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Overview









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Objectives of SOX Challenge

To enable students to:• Recognize the fundamental principles of the

Sarbanes-Oxley Act;• Identify the articles and rules of the Sarbanes-

Oxley Act;• Heighten your awareness of the importance of

being a member of the accounting profession and government compliance and governance.



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Overview









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The Year of the “Perfect Storm”

•Unethical Behavior •Fraudulent Activity•Downturn in the Economy•Massive Business Failures•Audit Failures•Election Year

Result: The most significant legislation affecting the accounting profession since 1933 Securities Act and1934

Securities Exchange Act



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Sarbanes-Oxley Act Intentions

To restore investor confidence in

financial reporting and public

capital markets.



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Corporate Scandals



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Year of 2002: Corporate Scandals

A wave of accounting scandals were exposed with a number of prominent companies admitting to misstating their financial statements, giving a misleading impression of their status.

* Conviction was subsequently overturned

ENRONOctober 16, 2001

Issue: Off-Balance Sheet Accounting and Financial Reporting

Fraud

Impact: $3 billion in undisclosed losses

ANDERSENJune 15, 2002

Issue: Convicted of obstruction of justice for shredding documents *

related to its audit of Enron

Impact: Demise of the United States' oldest accounting firm

GLOBAL CROSSINGJanuary 31, 2002

Issue: Financial reporting fraud through improper revenue

recognition

Impact: $12.4 billion in overstated earnings

ADELPHIAMarch 28, 2002

Issue: Financial reporting fraud and embezzlement

Impact: $2.5 billion of hidden debt

TYCOJune 3, 2002

Issue: CEO and CFO accept millions in interest-free loans

Impact: Over $200 million in fraud schemes

WORLDCOMJune 20, 2002

Issue: Financial reporting fraud

Impact: $9 billion in unreported expenses



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Enron Corporate Felons

Jeffrey Skilling Former CEO of Enron convicted of multiple

federal felony charges

Kenneth Lee LayFormer Chairman

(deceased) of Enron was indicted on 11 counts of

securities fraud but never sentenced

Andrew FastowFormer CFO of Enron created complex off-

balance-sheet Special Purpose Entities to conceal

massive losses



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Other Corporate Felons

Dennis Kozlowski Former CEO of Tyco

International was convicted of misappropriating over

$400 million of the company's funds

John RigasAdelphia’s former CEO and his sons were found guilty of concealing $2.3 billion in liabilities for personal use

Bernard EbbersWorldcom founder

improperly recorded $11 billion in revenues and

received $400 million in

off-the-books loans



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Sarbanes-Oxley Act of 2002

The Objectives The Focus

Improve corporate governance and rebuild public trust in corporate practices Corporate governance requirements

Increase the accountability of management of public companies and enable a higher level of financial reporting transparency

Enhanced disclosure requirements regarding financial statements and internal controls

Increase the oversight of publicaccounting firms and

audit quality

Creation of the Public CompanyAccounting Oversight Board

Place greater emphasis around efforts to prevent, detect, investigate, and remediate

fraud and misconduct

Increased criminal penalties andprotection for whistle-blowers

Restore investor confidence in the capital markets

Scope increases and limitations of external auditors functions



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The Goals

Sarbanes-Oxley Act

Reporting:Upgrade

Disclosures

Roles:Strengthen Corporate

Governance

Conduct:Expand Insider Accountability

Enforcement:Increase Oversight

Penalties:Broaden

Sanctions

Relationships:Heighten Auditor

Independence



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Existing Key Role the SEC

The primary federal regulatory agency for the securities industry

• Promote full disclosure• Protect investors against

fraudulent and manipulativepractices in the securities markets

Securities and Exchange Commission (SEC) was established by the Securities Act of 1933 and the Securities Exchange Act of 1934.



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Sarbanes-Oxley Act of 2002

• Enacted July 30, 2002; nine months after first announcement of Enron problems.

• Creates the Public Company Accounting Oversight Board or PCAOB, funded by accounting firms and registrants.

• Revises corporate governance standards.

• Adds new disclosure requirements.

• Creates new federal crimes related to fraud.

• Significantly increases criminal penalties for violations of the securities laws.



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History of the American Institute of Certified Public Accountants - AICPA

1921 ~ American Society of Certified Public Accountants ASCPA

1957 ~ American Institute of Certified Public Accountants AICPA

1936 ~ ASCPA merged into the AIA

1917 ~ American Institute of Accountants AIA

1916 ~ Institute of Public Accountants IPA

1887 ~ American Association of Public Accountants AAPA



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The Sarbanes-Oxley Act 2002 Overview of Titles

• Title I–Public Company Accounting Oversight Board• Title II–Auditor Independence• Title III–Corporate Responsibility• Title IV–Enhanced Financial Disclosures• Title V–Analyst Conflicts Of Interest• Title VI–Commission Resources And Authority• Title VII–Studies & Reports• Title VIII–Corporate & Criminal Fraud Accountability• Title IX–White-Collar Crime Penalty Enhancements• Title X–Corporate Tax Returns• Title XI–Corporate Fraud & Accountability



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Title I–Public Company Accounting Oversight Board

• Sec. 101. Establishment; administrative provisions.

• Sec. 102. Registration with the Board.

• Sec. 103. Auditing, quality control, and independence standards and rules.

• Sec. 104. Inspections of registered public accounting firms.

• Sec. 105. Investigations and disciplinary proceedings.

• Sec. 106. Foreign public accounting firms.

• Sec. 107. Commission oversight of the Board.

• Sec. 108. Accounting standards.

• Sec. 109. Funding.



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Section 101 Establishment of PCAOB

• Five members must be full-time and independent. Requires two CPAs to serve.

• Appointed by the Securities and Exchange Commission, not a government agency.

• Aim is to protect investors and other stakeholders of a public company.

• Ensure auditors of a company's financial statements have followed a set of strict guidelines.

Public Law 107 – 204, 107th Congress



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Public Company Accounting Oversight Board

• New regulator for public accounting profession• Three key functions of PCAOB:

• Establish standards for Accounting Firms• Auditing• quality control• Ethics• Independence

• Conduct inspections of firms to assess compliance with professional standards

• Take action to enforce PCAOB rules/standards



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Section 107 Commission Oversight of the Board

• PCAOB empowered to enforce compliance with SEC Exchange Act of 1934

• The SEC shall have oversight and enforcement authority over the PCAOB



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Section 108 Workpaper Retention and Accounting Standards

Mandates that the PCAOB establish Auditing Standards to require:

• Workpaper retention for 5 and 7 years

• Knowing violations of the workpaper retention rules carry penalties of up to 10 years in prison

• CPA firms utilize a second-partner review and approval of audit reports

• Testing of companies’ internal controls, including reporting of test results

“Are you sure we need to retain all these workpapers?!”



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PCAOB Standards

In April 2003, the PCAOB adopted substantially all

pre-existing standards issued by the AICPA

Auditing Standards Board (ASB) to initially establish:

“Standards of the PCAOB”



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PCAOB Key Standards

• AS No. 1: References in Auditors’ Reports to the Standards of the PCAOB• AS No. 2: Audit of Internal Control (Superseded by AS No. 5)• AS No. 3: Audit Documentation• AS No. 4: Reporting on Previously Reported Material Weakness Existence• AS No. 5: An Audit of Internal Control Over Financial Reporting That Is

Integrated with An Audit of Financial Statements• AS No. 6: Evaluating Consistency of Financial Statements• AS No. 7: Engagement Quality Review• AS No. 8: Audit Risk• AS No. 9: Audit Planning• AS No. 10: Supervision of the Audit Engagement• AS No. 11: Consideration of Materiality in Planning and Performing an Audit• AS No. 12: Identifying and Assessing Risks of Material Misstatement• AS No. 13: The Auditor's Responses to the Risks of Material Misstatement• AS No. 14: Evaluating Audit Results• AS No. 15: Audit Evidence



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Title II–Auditor Independence

• Sec. 201. Services outside the scope of practice of auditors.

• Sec. 202. Preapproval requirements.• Sec. 203. Audit partner rotation.• Sec. 204. Auditor reports to audit committees.• Sec. 205. Conforming amendments.• Sec. 206. Conflicts of interest.• Sec. 207. Study of mandatory rotation of

registered public accounting firms.• Sec. 208. Commission authority.• Sec. 209. Considerations by appropriate State

regulatory authorities.



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Section 201 Services Outside the Scope of Practice

• Bookkeeping, • Information systems design and implementation, • Appraisals or valuation services,• Actuarial services, • Internal audits,• Management and human resources services,• Broker/Dealer and investment banking services,• Legal or expert services related to audit services.

Services are considered “unlawful” if provided to a publicly held company by its auditor



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Section 203 Audit Partner Rotation

Mandatory Auditor Rotation: Partner cannot be lead or concurring partner for more than 5 consecutive years.

PARTNER

PARTNER

… and stay out for 5 years!



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Section 206 Conflicts of interest Cooling-off Period

Requires a 1-year Cooling-off Period

Audit firm cannot perform audit if CEO, CFO, controller, chief accounting officer, was employed by and participated in the audit 1-year prior to the start of the audit.



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Title III–Corporate Responsibility

• Sec. 301. Public company audit committees.• Sec. 302. Corporate responsibility for financial

reports.• Sec. 303. Improper influence on conduct of

audits.• Sec. 304. Forfeiture of certain bonuses and

profits.• Sec. 305. Officer and director bars and penalties.• Sec. 306. Insider trades during pension fund

blackout periods.• Sec. 307. Rules of professional responsibility for

attorneys.• Sec. 308. Fair funds for investors.



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Overview of Corporate Responsibility

• Audit Committee appoints Internal Auditor.

• Must evaluate the effectiveness of internal controls and disclose problems with controls and major fraud.

• Officers (CEO and CFO) must sign SEC filings and personally repay any bonus or stock profits received for 12 months after inaccurate filing.

• Prohibits insider trading during “blackout” periods.

• Attorneys must report material violations first to GC or CEO, then to Audit Committee.



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Section 302 Officer Responsibilities

CEO & CFO must be personally involved in the disclosure process:

• Review all reports,• Review specific issues

addressed in the reports,• Talk with key people who

prepared the report, and• Review reports with

appropriate third parties.

NO ONE CAN SIGN ON THEIR BEHALF!!!



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Title IV–Enhanced Financial Disclosures

• Sec. 401. Disclosures in periodic reports.

• Sec. 402. Enhanced conflict of interest provisions.

• Sec. 403. Disclosures of transactions involving management and principal stockholders.

• Sec. 404. Management assessment of internal controls.

• Sec. 405. Exemption.

• Sec. 406. Code of ethics for senior financial officers.

• Sec. 407. Disclosure of audit committee financial expert.

• Sec. 408. Enhanced review of periodic disclosures by issuers.

• Sec. 409. Real time issuer disclosures.



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Title IV–Enhanced Financial Disclosures

• Off balance sheet transactions must be reported.

• Accuracy and completeness required in pro-formas.

• Ban on personal loans to officers and executives.

• SEC to define the responsibility of management for establishing adequate internal controls and reporting under 404.

• Establishment of a Code of Ethics



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404 Certification

• Management assesses the internal control environment

• Annual report filed with SEC

• CEO & CFO signs the certification

• Certification establishes management’s responsibility and an assessment on the internal control environment for the year

• External auditor independently assesses the internal control environment

• External auditor attests to the assessment made by management



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Section 404 The SOX Evaluation Process

Establish internal control evaluation process. Determine significant controls and locations/business units to be included. Define project approach, milestones, time line, and resources. Launch project.

Plan & Scope the Evaluation

Document design of significant controls for all significant locations or business units.

Document Controls

Evaluate design and operating effectiveness of internal control over financial reporting and document results of evaluation.

Evaluate Design & Operating Effectiveness

Identify, accumulate, and evaluate design and operating control deficiencies; communicate findings and correct deficiencies.

Identify & Correct Deficiencies

Prepare management’s written assertion on the effectiveness of internal control over financial reporting.

Report on Internal Control

Prepare for independent auditor to conduct the internal control audit.Independent Audit of Internal Control



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SOX 404 Framework

• Management assesses the internal control environment

• Annual report filed with SEC

• CEO & CFO signs the certification

• Certification establishes management’s responsibility & an assessment on the internal control environment for the year

• External auditor independently assesses the internal control environment

• External auditor attests to the assessment made by management

SOX 404 Framework



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Framework of Internal Control COSO Control Components

• Control Environment - The control environment sets the tone of an organization, influencing the control consciousness of its people

• Risk Assessment - Every entity faces a variety of risks from external and internal sources that must be assessed both at the entity and the activity level

• Control Activities - These policies and procedures help ensure management directives are carried out

• Information and Communication - Pertinent information must be identified, captured and communicated in a form and timeframe that supports all other control components

• Monitoring - Internal control systems need to be monitored; a process that assesses the quality of the system’s performance over time

Section 404 addresses Internal Control over

Financial Reporting!



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Barriers to the effective implementation of controls

• Good controls on paper are not strictly followed in practice

• Grey areas in the rules – open to interpretation

• Lack of segregation of duties

• Collusion

• Management override

• Failure of senior management to lead by example

• Bureaucracy &/or formulaic compliance

• Failure to share knowledge of fraud experience, control weaknesses and control improvements

• Clash of cultures



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Section 406 Code of Ethics for Senior Financial Officers

• Requires companies to state if they have adopted a written code of ethics for their principal officers

• Includes all management and reporting personnel!

• Companies must provide code of ethics disclosure in their annual reports.



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Title V–Analyst Conflicts of Interest

• Sec. 501. Treatment of securities analysts by registered securities associations and national securities exchanges.

• SEC established Section 501 to foster greater public confidence in securities research, and to protect the objectivity and independence of securities analysts.



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Section 501 Requirements

• Brokers and dealers to include in research reports certifications by the research analyst that the views expressed in the report accurately reflect his/her personal views.

• Disclose whether or not the analyst received compensation or other payments in connection with his/her specific recommendations or views.

• Broker-dealers would also be required to obtain periodic certifications by research analysts in connection with the analyst's public appearances.



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Title VI–Commission Resources and Authority

• Sec. 601. Authorization of appropriations.

• Sec. 602. Appearance and practice before the Commission.

• Sec. 603. Federal court authority to impose penny stock bars.

• Sec. 604. Qualifications of associated persons of brokers and dealers.



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Title VII–Studies & Reports

• Sec. 701. GAO study and report regarding consolidation of public accounting

firms.

• Sec. 702. Commission study and report regarding

credit rating agencies.

• Sec. 703. Study and report on violators and violations

• Sec. 704. Study of enforcement actions.

• Sec. 705. Study of investment banks.



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Title VIII–Corporate & Criminal Fraud Accountability

• Sec. 801. Short title.

• Sec. 802. Criminal penalties for altering documents.

• Sec. 803. Debts nondischargeable if incurred in violation of securities fraud laws.

• Sec. 804. Statute of limitations for securities fraud.

• Sec. 805. Review of Federal Sentencing Guidelines for obstruction of justice and extensive criminal fraud.

• Sec. 806. Protection for employees of publicly traded companies who provide evidence of fraud.

• Sec. 807. Criminal penalties for defrauding shareholders of publicly traded companies.



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Section 802 Criminal Penalties for Altering Documents

• Destruction, alteration, concealment of records or interference with an knowing investigation; • violation fines and/or 20 years imprisoned.

• Workpapers that support the audit report must be retained for a seven-year period.



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Section 806 Protection for Employees who Provide Evidence of Fraud

• Several key considerations for ensuring Whistleblower protection and effective incident management are as follows:

• Establish multiple avenues for reporting compliance concerns.

• Employees must be informed that every effort will be made to keep their concerns confidential and/or anonymous.

“Who do you want to report?”



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Title IX–White Collar Crime Penalty Enhancements


• Sec. 902. Attempts and conspiracies to commit criminal fraud offenses.

• Sec. 903. Criminal penalties for mail and wire fraud.

• Sec. 904. Criminal penalties for violations of the Employee Retirement Income Security Act of 1974.

• Sec. 905. Amendment to sentencing guidelines relating to certain white-collar offenses.

• Sec. 906. Corporate responsibility for financial reports.



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Overview of Title IX

• Penalties for conspiracy, mail fraud (5 - 20 years) and ERISA (1 - 10 years and up to $500,000) are increased.

• Criminal penalties for knowingly certifying inaccurate financial reports: up to $5,000,000 and 20 years.

• The CEO and CFO must certify that the periodic financial reports.



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Section 906 Corporate responsibility for financial reports

The CEO and CFO must certify that the periodic financial reports fully comply with 1934 Securities Exchange Act and that the information fairly presents financial condition and results of operations.



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Title X–Corporate Tax Returns

• Section 1001 Sense of the Senate regarding the signing of corporate tax returns by chief executive officers.

• A sense of Congress statement is not law!



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Title XI–Corporate Fraud & Accountability


• Sec. 1102. Tampering with a record or otherwise impeding an official proceeding.

• Sec. 1103. Temporary freeze authority for the Securities and Exchange Commission.

• Sec. 1104. Amendment to the Federal Sentencing Guidelines.

• Sec. 1105. Authority of the Commission to prohibit persons

from serving as officers or directors.

• Sec. 1106. Increased criminal penalties under Securities

Exchange Act of 1934.

• Sec. 1107. Retaliation against informants.



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Title XI–Overview

• Tampering with a record, destroying, mutilating or impeding, obstructing or attempting to influence an official investigation - up to 20 years.

• SEC can freeze extraordinary payments to executives, shareholders.

• Persons who have violated SEC laws may be barred from serving as officers or directors of public companies.

• Retaliation against informants is a crime, with up to a 10 years.



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Corporate Fraud & Accountability

Criminal Penalties

The law creates tough penalties for those who

destroy records, commit securities fraud, fail to report fraud and

retaliate against informants.



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Section 1102 Tampering

Document DestructionA felony with penalties and

up to 20 years of imprisonment knowingly

destroying documents in a federal or bankruptcy

investigation.



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Section 1106 Increased Penalties

Doubles the penalties for criminal violations of Securities Exchange Act of 1934!



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Section 1107 Retaliation Against Informants

• Sweeping new protections for whistleblowers

• Two new criminal provisions to protect whistleblowers against retaliation



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Overview








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Ready for the SOX Challenge?



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Click to start

The SOX Challenge Game



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The SOX Challenge Game

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Corporate Scandals

Enforcement & Penalties

Accountability& Independence

ReportingDisclosures Potpourri

Points

QUIT

FINAL QUESTION


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SOX Challenge Game

Back to Game Board

What is Enron?

Back to Question


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This Texas based Energy company collapsed in 2001 as a result of financial reporting fraud.

Reveal Answer

SOX Challenge Game


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SOX Challenge Game

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Who is Jeffrey Skilling?

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This former Enron CEO was convicted of multiple federal felony charges.

Reveal Answer

SOX Challenge Game


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SOX Challenge Game

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What is Global Crossings?

Back to Question


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Of the many corporate scandals of 2002, this company was involved the highest dollar value of financial misstatement.

Reveal Answer

SOX Challenge Game


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SOX Challenge Game

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What is Obstruction of Justice?

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SOX Challenge Game

This charge was brought against Arthur Anderson in federal court in response to the destruction of audit documentation related to the audit of Enron.

Reveal Answer


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SOX Challenge Game

Back to Game Board

Who is Dennis Kozlowski?

Back to Question


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SOX Challenge Game

This Former CEO of Tyco International was convicted of misappropriating over $400 million of the company’s funds.

Reveal Answer


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SOX Challenge Game

Back to Game Board

What are Special Purpose Entities (SPEs)?

Back to Question


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Originally created by Enron CEO Andrew Fastow, these companies facilitate financial fraud by hiding losses properly attributable to Enron in a process known as off-balance sheet financing.

Reveal Answer

SOX Challenge Game


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SOX Challenge Game

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What is the SEC?

Back to Question


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SOX Challenge Game

This government agency is the primary federal regulatory agency for the securities industry.

Reveal Answer


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SOX Challenge Game

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What is Section 802?

Back to Question


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SOX Challenge Game

This section of SOX imposes a maximum penalty of 20 years in prison and fines for interfering in a federal investigation by destroying, altering, or concealing evidence.

Reveal Answer


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SOX Challenge Game

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Back to Question


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SOX Challenge Game

This section of SOX requires CEO’s and CFO’s to certify periodically that their company’s financial reports fully comply with 1934 Securities Exchange Act and that the information fairly presents financial condition and results of operations.

Reveal Answer


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SOX Challenge Game

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What is 5,000,000 and 20 years in prison?

Back to Question


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SOX Challenge Game

This is the maximum penalty imposed by Title IX for knowingly certifying inaccurate financial statements.

Reveal Answer


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SOX Challenge Game

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Back to Question


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This section of Title 11 doubled the dollar value of penalties for violations of the Securities and Exchange Act of 1934

Reveal Answer

SOX Challenge Game


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SOX Challenge Game

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Back to Question


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SOX Challenge Game

This section of SOX protects retaliation against informants (whistleblowers) attempting to expose financial fraud.

Reveal Answer


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SOX Challenge Game

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What is management?

Back to Question


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SOX Challenge Game

The group that is responsible for the accuracy of financial reports issued by a company.

Reveal Answer


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SOX Challenge Game

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Back to Question


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SOX Challenge Game

This section of SOX specifies the services that are beyond the scope of practice for a firm that is performing the audit of a public company.

Reveal Answer


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SOX Challenge Game

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What is 5 years?

Back to Question


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SOX Challenge Game

This is the maximum amount of time that an audit partner can serve as either the lead or concurrent partner on an audit in any ten year period under Section 203 of SOX.

Reveal Answer


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SOX Challenge Game

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What is a cooling off period?

Back to Question


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SOX Challenge Game

This phrase is commonly used to describe the one year waiting period an Audit firm cannot perform audit services if CEO, CFO, controller, chief accounting officer, was employed by and participated in the audit 1-year prior to the start of the audit.

Reveal Answer


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SOX Challenge Game

This Section of SOX requires that a client’s auditors report directly to a company’s audit committee and not to the company’s management.

Reveal Answer


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SOX Challenge Game

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What is nine (9) Sections?

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SOX Challenge Game

This is the number of sections that are contained in Title II-Auditor Independence of SOX.

Reveal Answer


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SOX Challenge Game

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What is the Public Company Accounting Oversight Board?

Back to Question


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SOX Challenge Game

This entity was created by the Sarbanes Oxley Act of 2002 and is charged with creating standards for reporting disclosures.

Reveal Answer


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SOX Challenge Game

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What is section 302?

Back to Question


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SOX Challenge Game

This Section of the Sarbanes Oxley Act of 2002 requires that a company’s CEO and CFO personally sign off on the company’s financial reports.

Reveal Answer


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Back to Question


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SOX Challenge Game

This Section of Sarbanes-Oxley Act states that the company’s outside auditor must validate and attest to the accuracy of management’s assertions on its internal audit control program on an annual basis.

Reveal Answer


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What was 1957?

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SOX Challenge Game

This was the year the American Institute of Certified Public Accountants (AICPA) was founded.

Reveal Answer


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What is section 406?

Back to Question


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SOX Challenge Game

This section of SOX requires a company to disclose whether a company has a Code of Ethics.

Reveal Answer


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What is COSO?

Back to Question


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SOX Challenge Game

This framework for evaluating the internal control process over financial reporting is the most commonly used by company executives publishing reports to comply with Section 404.

Reveal Answer


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Who are Paul Sarbanes and Michael Oxley?

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SOX Challenge Game

This Senator and Congressman are credited with drafting the most significant legislation affecting the accounting profession since 1933 Securities Act and 1934 Securities Exchange Act -first and last names.

Reveal Answer


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SOX Challenge Game

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What is Title IX?

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SOX Challenge Game

This title of SOX is also known as the White Collar Crime Penalty Enhancements.

Reveal Answer


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What is Adelphia?

Back to Question


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SOX Challenge Game

This family run corporation reported financial statements that hide over $2.5 billion of debt and the senior officers of the company were found guilty of embezzlement on March 28, 2002.

Reveal Answer


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SOX Challenge Game

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What is PCAOB Audit Standard #2?

Back to Question


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SOX Challenge Game

Of the five Audit Standards published, this provision was superseded by Audit Standard #5.

Reveal Answer


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SOX Challenge Game

The SEC established this section to foster greater public confidence in securities research, and to protect the objectivity and independence of securities analysts.

Reveal Answer


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Back to Question


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SOX Challenge Game

This section of Title X provides a Sense of the Senate regarding the signing of corporate tax returns by chief executive officers.

Reveal Answer


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Final Question Challenge

Reveal Answer

Reveal Final SOX Challenge Question

Risk your points



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Back to Game Board

Final Question Challenge

These are the five main objectives for the enactment of the

Sarbanes-Oxley Act of 2002.

Reveal Answer



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Five main objectives of SOX

What is:• Improve corporate governance and rebuild public trust

in corporate practices • Increase the accountability of management of public

companies and enable a higher level of financial reporting transparency

• Increase the oversight of public accounting firms and audit quality

• Place greater emphasis around efforts to prevent, detect, investigate and remediate fraud and misconduct

• Restore investor confidence in the capital markets

Game Over!



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Congratulations!

You are allSarbanes-Oxley

Specialists!


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Questions?

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