Sarbanes Oxley and internal audit

Companies listed on the New York Stock Exchange had to have an internal audit department in place by October 31 to ensure that the new audit chiefs could assess the scope of their departments’ work, as well as how to meet the new Sarbanes Oxley laws. They had to hire new directors and prepare an audit plan due to the provisions of the Sarbanes Oxley Act passed in 2002. The companies had to hire staff as well as allocate a budget to the new department, determine how they will document compliances and how much work to assign the audit department. The Sarbanes Oxley Act of 2002 has created a revolutionary change in corporate governance as well as internal control for companies listed on the New York Stock Exchange. This Act was passed to control fraud and provide reliability in financial reporting.

The law required NYSE-listed companies to determine financial reporting risks, design ways to manage the risks, fix the problems that create those risks, analyze the effectiveness of control measures taken, retest, and retest. keep record.

The Sarbanes Oxley Act had a profound impact on internal auditors, who with their expertise in business process analysis, financial risk management, and operational control testing, were suddenly in high demand and every company seemed to need their services. Therefore, in addition to their normal duties, the auditors found that they were spending more and more time trying to comply with Sarbanes-Oxley. Companies that correctly and intelligently used the experience of auditors have had unprecedented success, as they provide valuable guidance in various aspects of running a company, such as risk management, prioritization of objectives, optimization of operations, forms of devices to reduce operating costs, helps the company to get the most tax. benefits etc.

The Sarbanes Oxley Act required auditors to scrutinize financial reports carefully, as the consequences of reporting them incorrectly were severe. The General Manager of the companies and the head of Internal Audit had to personally certify the accuracy of the financial statements.

Sarbanes Oxley and Internal Audit:

The Sarbanes-Oxley Act has made it mandatory for internal audit departments

• To be consulted regarding the internal control of the company.
• Be consulted regarding enterprise risk management strategies.
• Help the company to identify, classify and evaluate risks, eliminating risks, as well as evaluating the control methods adopted periodically.
• Recommend ways to control risks.
• Help design an internal control program for the company.
• Recommend and write procedures for the internal control of a company.
• Help maintain repository control.
• Do project managers make every effort to comply with section 404?
• Help design tests of control effectiveness and help conduct the test and evaluate the results.

Thus, the law created a great demand for companies to have good internal audit departments and their expert advice. The role of internal auditors and audits in the management and guidance of the company increased significantly due to the Sarbanes-Oxley Act. There are companies that offer services and products to help businesses run successfully.