Internal Audit Handbook（2007）D14-Services Provided by Internal Audit Relating to the Sarbanes-Oxley Act.pdfVIP

Special Topics and Supplementary Discussion D | 14 | 14.1 Services Provided by Internal Audit Relating to the Sarbanes-Oxley Act General Principles 14 Services Provided by Internal Audit Relating to the Sarbanes-Oxley Act 14.1 General Principles 14.1.1 Legal Framework Key POI ntS ••• • SOX was passed by the United States Congress in 2002 with an aim to protect investors and restore the public’s confidence in the capital markets. • Among the many provisions of SOX, sections 302 and 404 of SOX are of par- ticular importance to internal auditors. • SOX section 302 makes management, particularly the CEO and the CFO, re- sponsible for the compliance of the company’s financial reports. • To meet these obligations, SOX section 404 requires management to provide evidence that all core business processes relevant to the financial reports, in- cluding the internal controls, are documented and effective. • In addition, SOX has created the Public Company Accounting Oversight Board, or PCAOB. In recent years, there has been a marked increase in uncertainty among investors, LossLoss ofof t trustrust especially small investors, about the compliance of financial reports and the man- agement of companies. In part, this is because of several highly publicized cases of companies manipulating financial statements and collapsing as a result. In many cases, it was shown clearly that the causes were mismanagement and fraudulent acts, resulting in severe losses for shareholders. These events led to a serious loss of trust among investors in capital markets around the world. In the United States, these developments are of particular importance, bec