Is SOX 404(a) Management Internal Control Reporting an Effective Alternative to SOX 404(b) Internal Control Audits?

2017 ◽  
Vol 36 (3) ◽  
pp. 71-89 ◽  
Author(s):  
Yangyang Fan ◽  
Chan Li ◽  
K Raghunandan
Keyword(s):  
Internal Control ◽  
House Of Representatives ◽  
Cost Effective ◽  
Securities And Exchange Commission ◽  
Effective Alternative ◽  
Section 404 ◽  
Public Companies ◽  
Sarbanes Oxley ◽  
Cost Effective Alternative ◽  
Management Reporting

SUMMARY Section 404 of the Sarbanes-Oxley Act (SOX; U.S. House of Representatives 2002) continues to be controversial. Using samples of Securities and Exchange Commission (SEC) registrants with market capitalizations of less than $150 million, we find that non-accelerated filers have a significantly larger reduction in the likelihood of material misstatements, discretionary revenues, and discretionary accruals compared to smaller accelerated filers after non-accelerated filers became subject to the requirements of Section 404(a). Our findings are consistent with the argument that management reporting on internal controls (Section 404(a)) may be a cost-effective alternative to internal control audits (Section 404(b)) for smaller U.S. public companies.

Sarbanes-Oxley and Public Reporting on Internal Control: Hasty Reaction or Delayed Action?

2013 ◽  
Vol 27 (2) ◽  
pp. 371-408 ◽  
Author(s):  
Parveen P. Gupta ◽  
Thomas R. Weirich ◽  
Lynn E. Turner
Keyword(s):  
Internal Control ◽  
Public Reporting ◽  
Section 404 ◽  
Wall Street ◽  
Public Companies ◽  
The Public ◽  
Sarbanes Oxley ◽  
Legislative Proposals ◽  
Set Up ◽  
The U.S

SYNOPSIS Since its passage, the Sarbanes-Oxley Act of 2002 has been criticized, and praised, by many on numerous grounds and claims. However, no single provision of this law has come under more attack than Section 404, which mandates public reporting of internal control effectiveness by an issuer's management as well as its independent auditors. Even after 10 years, the opposition to the Section 404 internal control requirements has continued to the point where the U.S. Congress through two separate Acts—the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and the 2012 Jump Start Our Business Startups (JOBS) Act—have permanently exempted the non-accelerated SEC filers and the “emerging growth” issuers with revenues of $1 billion or less from Section 404(b) of the Sarbanes-Oxley Act of 2002. Many of those who oppose the Section 404 requirements rest their claim on grounds that the U.S. Congress acted in haste in mandating the public reporting of internal controls by U.S.-listed companies and that the issue was not well thought out or debated. They also contend that the U.S. Congress acted under pressure because of the public outrage over the bankruptcy filings of Enron and WorldCom. To the contrary, this paper shows that the debate over public reporting of internal control by U.S. public companies is more than six decades old, dating back to the McKesson & Robbins fraud. This paper reviews relevant legislative proposals, bills introduced in both the House and the Senate, regulatory efforts by the SEC, and the recommendations of many commissions set up by the private sector to inform the reader how these efforts were the deliberative precursors to what was eventually codified in Section 404 of the Sarbanes-Oxley Act of 2002.

Koss Corporation Case: Trouble in Brew City

2011 ◽  
Vol 26 (3) ◽  
pp. 547-568 ◽  
Author(s):  
Brian Daugherty ◽  
Daniel G. Neely
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Real Life ◽  
Chief Executive ◽  
Securities And Exchange Commission ◽  
Financial Statement Fraud ◽  
President Obama ◽  
Public Companies ◽  
Chief Operating Officer ◽  
Sarbanes Oxley

ABSTRACT This instructional case provides auditing students an opportunity to examine an interesting real-life embezzlement and financial statement fraud occurring at a publicly traded company in the post-Sarbanes-Oxley (SOX) era. The case focuses on independent auditors' and senior management's reporting responsibilities related to internal control over financial reporting involving smaller public companies (nonaccelerated filers). While all public companies are subject to external auditor and management attestation on the effectiveness of internal control over financial reporting following SOX, the Securities and Exchange Commission (SEC) granted nonaccelerated filers numerous extensions for the effective date of required auditor attestation. In 2010, President Obama signed legislation to permanently exempt nonaccelerated filers from auditor attestation. The case also highlights inherent risk assessments by the independent auditor when one individual holds multiple C-level titles (Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, etc.) within the organization concurrent with membership on the board of directors, and requires students to recommend internal control policies and procedures designed to prevent or detect the embezzlement.

Section 404 Compliance and Financial Reporting Quality

2010 ◽  
Vol 24 (3) ◽  
pp. 441-454 ◽  
Author(s):  
Albert L. Nagy
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Reporting Quality ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Small Companies ◽  
Section 404 ◽  
Financial Reports ◽  
Sarbanes Oxley

SYNOPSIS: This study examines whether the Sarbanes-Oxley Act Section 404 (S404) compliance efforts lead to higher quality financial reports. An objective of S404 is to encourage companies to devote adequate resources and attention to their internal control systems, which should lead to more reliable financial statements. A natural laboratory of S404 compliance and noncompliance companies exists because the Securities and Exchange Commission has deferred the S404 compliance date for small companies (nonaccelerated filers). A logistic regression model is estimated using a sample of companies surrounding the S404 compliance threshold to measure the S404 compliance effect on the likelihood of issuing materially misstated financial statements. The results show a significant and negative relation between S404 compliance and issuance of materially misstated financial statements, and suggest that the S404 regulation is meeting its objective of improving the quality of financial reports.

ANCORSTEEL 4300

Alloy Digest ◽  
2009 ◽  
Vol 58 (11) ◽  
Keyword(s):  
Fracture Toughness ◽  
Physical Properties ◽  
Tensile Properties ◽  
Cost Effective ◽  
Heat Treating ◽  
Effective Alternative ◽  
Powder Metal ◽  
Secondary Processing ◽  
Cost Effective Alternative

Abstract Ancorsteel 4300 alloy ferrous powder simulates wrought steel compositions and is a cost-effective alternative to alloys requiring secondary processing. This datasheet provides information on composition, physical properties, hardness, and tensile properties as well as fracture toughness. It also includes information on heat treating and powder metal forms. Filing Code: SA-611. Producer or source: Hoeganaes Corporation.

scholarly journals Robotic hepatectomy is a safe and cost-effective alternative to conventional open hepatectomy: A single center experience

HPB ◽  
2020 ◽  
Vol 22 ◽  
pp. S186-S187
Author(s):  
J. Hawksworth ◽  
N.P. Llore ◽  
M.L. Holzner ◽  
P. Radkani ◽  
E. Mesler ◽  
...  
Keyword(s):  
Cost Effective ◽  
Effective Alternative ◽  
Single Center ◽  
Robotic Hepatectomy ◽  
Single Center Experience ◽  
Open Hepatectomy ◽  
Cost Effective Alternative

A recent overview on the porphyrin-based π-extended small molecules as donors and acceptors for high-performance organic solar cells

2021 ◽  
Author(s):  
Venkatesh Piradi ◽  
Feng Yan ◽  
Xunjin Zhu ◽  
Wai-Yeung Raymond Wong
Keyword(s):  
Solar Cells ◽  
Solar Cell ◽  
Small Molecules ◽  
Organic Solar Cells ◽  
High Performance ◽  
Cost Effective ◽  
Effective Alternative ◽  
The Past ◽  
Cost Effective Alternative ◽  
Silicon Based

Organic solar cells (OSCs) have been considered as a promising cost-effective alternative to silicon-based solar cell counterparts due to their lightweight, mechanical flexibility, and easy fabrication features. Over the past...

Mini-Gastric Bypass by Mini-Laparotomy: A Cost-Effective Alternative in the Laparoscopic Era

2007 ◽  
Vol 17 (11) ◽  
pp. 1482-1486 ◽  
Author(s):  
Roger Noun ◽  
Eddy Riachi ◽  
Smart Zeidan ◽  
Bassam Abboud ◽  
Viviane Chalhoub ◽  
...  
Keyword(s):  
Gastric Bypass ◽  
Cost Effective ◽  
Effective Alternative ◽  
Mini Gastric Bypass ◽  
Cost Effective Alternative ◽  
Mini Laparotomy
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