ACCTG 230 Study Guide - Midterm Guide: Public Company Accounting Oversight Board, Bank Reconciliation, Internal Control
Document Summary
Sarbanes-oxley act: also known as the public company accounting reform and. Investor protection act of 2002, established a variety of guidelines related to auditor-client relations and internal control procedures. Public company accounting oversight board (pcaob) establishes standards, consists of 5 members appointed by the securities and exchange. Corporate executives must personally certify the company"s financial documents or face severe financial punishment and possibly imprisonment. Auditors cannot perform non-audit services such as consulting with a client. Auditors of public companies must maintain all work papers for 7 years or could be sentenced to prison for willful violation. Lead auditor of a company can only stay with that company for 5 years before someone else needs to take over as lead auditor. Auditors are hired by the audit committee of the board of directors of the company, not by the company management.
