Question

In order to prevent, detect, and correct fraud, there are various regulatory efforts in accounting and audit profession including the Sarbanes-Oxley Act. Summarize and compare the regulatory efforts

Answer 1

There are various regulatory efforts taken to prevent , detect and correct frauds relating to accounting and audit profession which are described as follows :-

1. Implementation of certification requirements of financial statements by the CFO of the company so that he can be made personally liable and accountable for any fraud that may have done in financial statements .

2. Establishment of testing and certification of internal control over financial reporting to ensure that no fraud can occur just because of weak internal controls and corporations to pay adequate attention towards maintaining internal control.

3. Enhancement of corporate governance = steps like bringing independent directors in the board of directors of corporation to ensure equal, just and fair policies of corporations.

4. Establishment of audit committee = in order to ensure that there is supervisory authority over the affairs of management relating to preparation and presentation of financial statements.

All these measures lead to transparent working of corporation and prevention, timely detection and correction of any type of accounting and auditing frauds.