Description
Use the Internet to research the internal control requirements under Sarbanes-Oxley Act (SOX) and the Committee of Sponsoring Organizations of the Treadway Commission‘s (COSO) guidance on internal controls
- Examine the importance of the audit committee oversight related to the quality of the internal controls of an organization. Analyze the audit committee’s responsibilities regarding risk assessment and internal control monitoring. Indicate whether or not the audit committee is the best to perform the function.
- Contrast the opinion provided by the independent auditor concerning management’s assessment of internal controls over the financial reporting system with the audit opinion on the financial statements in general. Argue for providing both a qualified opinion over the financial reporting system and an unqualified opinion on the financial statements.
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Explanation & Answer
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Question One
In auditing and accounting, internal control is seen as the process in which an
organization achieves its objectives in operations, reliability in financial reporting, and
compliance with policies, rules and regulations (“Internal Control Process” 37). Financial
reporting is a matter overseen by an audit committee. The audit committee is also responsible for
selecting the sole auditor; both internal and external and handling the audit results. The
committee is chosen from the board of directors although sometimes a committee member may
be selected from outside the board. This committee is significant to any business because for a
publicly traded company to appear is the stock exchange market list, i...