LEGL 226 Chapter Notes - Chapter 27: Public Company Accounting Oversight Board, Financial Statement, Whistleblower
Document Summary
The public company accounting oversight board- job is to ensure that investors receive accurate and complete financial information. Under sox, auditors must report to the audit committee of the client"s board of directors, not to senior management. The auditor may not offer consulting services except taxes and internal control systems. Must rotate audit accounts every 5 years, so there is no conflict of interest. Auditors confirm financial information to ensure trust to outside people. Vouching- choose a transaction listed in the companies books and check backward to make sure that there is original data to support it. Tracing- the accountant begins with an item of original data and traces it forward to ensure that it has been properly recorded throughout the book keeping processes. Opinions of an audit statements fairly, represents its financial condition in accordance with gaap. Qualified opinion- statements are generally accurate, there is nonetheless can. Unqualified opinion- clean, most favorable opinion, indicates company"s financial.
