Sarbanes-Oxley Training Manual
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Sarbanes-Oxley Training Manual
Introduction
Any company that is considering becoming a public company must align themselves to the Sarbanes-Oxley Act. This training manual will point the company in the right direction, explain what the act means, and how it will affect the company. Included will be the role accounting takes in making ethical decisions for the company, and why the act was enacted.

The current rule making bodies for the accounting profession in the United States, and the standards set forth that a company must adopt to be in compliance with the Sarbanes-Oxley act. The way to ensure that internal controls function properly and what is required to hold management accountable for these controls.

The reason the Sarbanes-Oxley act was enacted
“The Sarbanes-Oxley Act of 2002 is legislation enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise” (Spurzmen, 2006,p. 1). The Enron and WorldCom financial scandals cost shareholders billions of dollars and the public lost its confidence in securities markets.

The Sarbanes-Oxley Act contains eleven sections to cover issues such as internal control assessment, auditor independence, and enhanced financial disclosure. The Sarbanes-Oxley Act defines what financial records should be stored and for how long. “The act is administered by the Securities and Exchange Commission (SEC), which sets deadlines for compliance and publishes rules on requirements” (Spurzmen, 2006,p. 1).

The Sarbanes-Oxley Act encourages ethical decisions and record keeping in accounting. Proper ethical practices is extremely important in accounting. Accountants are trusted to work in the best interest of their client. Investors and clients rely on the accountant to provide accurate financial information, and it is the duty of the accountant to follow the accounting code of ethics, which includes confidentiality, integrity, competence, and objectivity.

The rule making bodies for the accounting profession
The FASB, SEC, and PCAOB are the rule-making bodies for the accounting profession . The Financial Accounting Standards Board (FASB) is a private, nonprofit organization that has developed the generally accepted accounting principles (GAAP) within the United States.

The mission of the FASB is to create and continually improve the standards for financial accounting and the reports that are issued to the decision makers, and other users of the financial information. The FASB mandates that public corporations use GAAP in reporting their financials to shareholders under the Sarbanes- Oxley Act.

The Securities and Exchange Commission (SEC) is a federal agency there to protect investors, maintain efficient markets, and facilitate capital. The SEC is responsible for nations stock exchanges, regulating the securities industry, and enforcing federal security laws. They influence the Sarbanes-Oxley Act by the review of financial statements every three years, enhancing the enforcement programs so that investigations can be resolved quicker.

The Public Company Accounting Oversight Board (PCAOB) is a nonprofit organization congress created to oversee, discipline, inspect, and regulate accounting firms in their roles as auditors for public companies. They are also in charge of issues such as internal control assessments, enhanced financial disclosure, auditor independence, and corporate governance .

The documentation standards for SOX compliance
The Sarbanes-Oxley Act requires companies to follow highly enforced accounting and documentation practices. These practices when followed help to eliminate fines and legal problems. Most often publicly traded companies must establish, document, and maintain internal controls and procedures for financial reporting.

The Sarbanes-Oxley Act of 2002 recommended the Board to provide a guideline that will require firms to prepare and keep audit documentation for a minimum of seven years. The reports must be in sufficient detail to support the conclusions reached in the auditors report. These documents are prepared at the time of the audit and forwarded to the company for review.

In addition, they must use a certain terminology to describe the degree of responsibility

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Sarbanes-Oxley Act And Role Accounting Takes. (June 17, 2021). Retrieved from https://www.freeessays.education/sarbanes-oxley-act-and-role-accounting-takes-essay/