The Sarbanes Oxley Act has had consequences for many areas of corporate activities,including the following impact on the work of the auditor:
A)The auditor is now required to report all fraudulent activities he/she uncovers directly to the Securities and Exchange Commission.
B)The auditor must prepare a report verifying the information in the financial statements.
C)The auditor must monitor how well management is carrying out its financial reporting responsibilities.
D)The auditor is specifically required to evaluate the internal controls used by management to prepare financial information.

Question

Quizplus · Accepted Answer

The Sarbanes Oxley Act specifically requires auditors to evaluate the internal controls used by management to prepare financial information. This is aimed at improving the reliability and accuracy of financial statements, and to prevent fraudulent activities. The Act does not require auditors to report all fraudulent activities directly to the SEC, but they are required to report any material misstatements or weaknesses in internal controls to management and the audit committee. Additionally, while auditors must provide a report on the financial statements, it does not require them to verify all the information in the financial statements. Finally, while auditors are expected to monitor how well management is carrying out its financial responsibilities, this is not a new requirement introduced by the Act.

The Sarbanes Oxley Act Has Had Consequences for Many Areas