LAW 421 WEEK 5 INDIVIDUAL Article Review Sarbanes-Oxley Act

The Sarbanes-Oxley Act of 2002 addresses perceived weaknesses in internal controls, the systems a public company employs to collect, process, and disclose financial information to satisfy its statutory reporting requirements. Recent corporate and accounting frauds have demonstrated the inadequacy of internal controls with regard to revenue recognition. The act also contains requirements aimed at ensuring proper revenue recognition.

The new auditing requirements for internal controls states that auditors must test the scope of a company's internal control procedures and present its findings in its annual audit report. This audit report must include an evaluation of whether the internal controls provide both a system of...