The importance of audit committees increased through the years and especially from pre-Sarbanes – Oxley to post-Sarbanes – Oxley. Although, what are the responsibilities of the audit committee members? How does a Chief Audit Executive (CAE) more effectively serve their audit committee members? How do auditors communicate with audit committees? What are the requirements for audit committees? Most of these questions are inherited from what the audit committee’s best practices are.
Past research findings conclude that the Securities Exchange Commission (SEC) recommended companies to have audit committees in 1972. Then in 1987 the National Commission on Fraudulent Financial Reporting six recommendations in preventing fraudulent financial reporting. In 1999, the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committee also made recommendations. Soon after, these recommendations led to SOX to increase audit committees’ responsibilities in 2002. According to Section 204 of Sarbanes – Oxley (SOX), it concludes that an audit committee’s need to use accounting policies for financial information within Generally Accepted Accounting Principles (GAAP) have been communicated in some manner.
Do audit committees add value to the financial management and/ or the overall governance of the financial statements? Audit committees are effective, meet their goals, and improve the financial and overall management. The Securities Exchange Commission (SEC) adopted rules that are implemented in section 204 of SOX which require auditors to report to audit committees. These rules require auditors to report all critical accounting policies and practices, all material accounti...
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"Section 204 -- Auditor Reports to Audit Committees." Law School » University of Cincinnati College of Law. Web. 06 Apr. 2011.
“Audit Committee Responsibilities Disclosed Since Sarbanes-Oxley." NYSSCPA.ORG | The Web Site of the New York State Society of CPAs. Web. 06 Apr. 2011.
"Audit Committee Responsibilities." NYSSCPA.ORG | The Web Site of the New York State Society of CPAs. Web. 06 Apr. 2011.
SEC advised that “critical accounting policies” are those that: www.jenner.com. SARBANES-OXLEY UPDATE. Auditor Communication with Audit Committees ...
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