%253Cp%2520class%253D%2522MsoNormal%2522%253E%253Cspan%2520class%253D%2522c1%252
ID: 2503672 • Letter: #
Question
%253Cp%2520class%253D%2522MsoNormal%2522%253E%253Cspan%2520class%253D%2522c1%2522%253EIdentify%2520the%2520basic%2520provisions%250Aof%2520the%2520Sarbanes-Oxley%2520Act%2520that%2520specifically%2520deal%2520with%2520ethics%2520and%250AIndependence%2520and%2520research%2520how%2520this%2520Act%2520has%2520affected%2520auditors%250Asince%2520it%2520was%2520established%2520in%25202002.%2520Be%2520sure%2520to%2520include%2520and%250Achanges%2520to%2520auditing%2520standard%2520that%2520have%2520taken%2520place.%253C%252Fspan%253E%253C%252Fp%253E%250AExplanation / Answer
The Sarbanes-Oxley Act of 2002 has dramatically affected overall awareness and
management of internal controls in public corporations. Responsibility for accurate
financial reporting has landed squarely on the shoulders of senior management,
including the potential for personal criminal liability for CEOs and CFOs. Since
modern accounting systems are computer based, accurate financial reporting
depends on reliable, and secure, computing environments.
Information security professionals are being asked to understand and comply with
Sarbanes-Oxley in short time frames and with limited budgets. It is important that
they learn as much as they can and create realistic compliance strategies. This
paper will describe Sarbanes-Oxley, discuss some of the current strategies for
compliance and address some specific guidelines for typical security topics.
On July 30, 2002, the Sarbanes-Oxley Act of 2002 was signed into federal law. The
stated purpose of the law is "To protect investors by improving the accuracy and
reliability of corporate disclosures made pursuant to the security laws, and for other
purposes."1 The effect of the law is sweeping, long term changes in the way publicly
traded companies manage auditors, financial reporting, executive responsibility and
internal controls. While numerous laws and regulations governing the conduct of
public companies already exist, SOX is considered the most substantial piece of
corporate regulation since the securities laws of the 1930's.
The creation of SOX followed one of the most turbulent periods in US corporate
history. The very public collapse of corporate giants like Enron and WorldCom
damaged the fundamental trust in US corporations and cost investors billions of
dollars. It also led to the demise of one of the nation
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