Describing of the Sarbanes-Oxley Act

1. In two to tercet paragraphs, describe the Sarbanes-Oxley lick and why it is chief(prenominal) to the write up profession. (15 psyches) Sarbanes-Oxley Act was created in state to en sealed that controls were implemented and monitored by the regularisation authority. Congress wanted to make sure that on that point was a specific touchstone and guideline for companies to follow in coif to prevent fraud at such a large scale. When followed correctly there ar controls set in redact that are internal which are governed by the managers and checked upon by the Federal restrictive authorities.This act was passed in 2002, prior to past the rules were more relaxed and when the crisis occurred with Enron that was a breaking point for the American people, especi entirelyy those who lost a lot of money. Need little to say this effective made it harder for fraud to occur. There were and cool it are several grey areas that the players knobbed exploit.2. Name and briefly describ e the phoebe bird dollar bill components of COSOs internal control framework. (10 points) The five components of COSO are as follows a. Control purlieu Basically means that the leaders of the makeup set the tone for ethics and levy them with a code of conduct followed by consequences when not abided by. b. Risk assessment this right means they check there controls for weaknesses regularly and fix any discrepancies with stronger controls. c. Control activities These are segregation of duties, account reconciliations, and info impact controls. They are considered internal controls as hearty that protect the processes in broadcast. d. Information and conference The internal and external reporting process. The text book stated that it includes technology assessments as well.3. Describe the relationship numberween the Sarbanes-Oxley Act and COSO. (10 points) COSO is used to check in on the organizations and offer guidelines for them to follow when setting upo their controls. If all five elements are followed then they go away not have much to disturb about when auditing occurs and fraud would be less likely.4. tomcat Jackson is a certified public accountant who really likes to go to Las Vegas, play poker, and bet on football games. Tom knows that the accounting profession disapproves of gambling, but because he spends a lot of time studying sports facts and how to tempt at poker, he feels that he is evidently making educated decisions based on facts. He says that this is no different from utilise accounting information to buy stocks. subprogram the fraud triangle as a basis to comment on Toms gambling activities. (15 points) In this trip Tom has all of the elements in place to commit fraud. He has the opportunity because of the personality of his business.He has already decided that gambling excessively is ok because it is a calculated risk. not realizing he is putting himself in a position where the pressure will devolve into place when he d oes lose. Debt is always looked at when being evaluated for sensitive positions that deal with study security or money involvement. point if it is just a public self-confidence clearance that the person is seeking on order to get the position they salve will review your credit history at a minimum.