Home | Contact Us | Site Map







 

Sarbanes Oxley (SOX) is the law passed in the wake of recent corporate scandals Enron and Worldcom. These companies fudged their financial statements and the auditors went along with them. Enron is gone and Worldcom has changed its name to MCI. Executives of these companies have been accused of criminal misconduct. Arthur Andersen (the auditor) is out of business. Most people think that SOX applies to public companies only, but this is not exactly true. Public companies are now required to do certain things that donít apply to private and nonprofit companies, but the standards set for auditors apply to all auditors for all their audit clients.

The problem: Arthur Andersen lost its independence. Andersenís non-audit work for Enron exceeded its audit work by millions of dollars. Andersen compromised its responsibility to shareholders in order to keep the millions of dollars in consulting fees it was receiving from its clients. This has put the light on auditor independence for all audits.

Auditors are not permitted to:

  • Make management decisions
  • Prepare journal entries
  • Prepare source documents
  • Make investment decisions
  • Hire or terminate employees
  • Represent the client before banks or other financial statement users
  • Do anything that they will have to audit

This applies to all a firmís audit clients, not just SEC clients. The rules are the same. Often CPAs would help its clients with these things. No more. Clients are required to do more themselves.

The problem is that often organizations with small accounting staffs do not have the time or the talent to do all these things. Focus Accounting Solutions can help.

 


Contact Us | Home | Site Map

727.278.5321
© 2005 Focus Accounting Solutions, LLC, All Rights Reserved
Comments to webmaster@focusaccountingsolutions.com

Site Design by DVD Consulting Incorporated