Question

Explain the significance of Sarbanes-Oxley (SOX) in regards to Accounting Information Systems auditing.

Answer 1

SOX was designed with the goal of implementing accounting and disclosure requirements that: Increase transparency in corporate governance and financial reporting. Formalize a system of internal checks and balances

Significance of SOX in regards to accounting information systems auditing is as below.

1. The Sarbanes-Oxley (SOX) Act of 2002 came in response to highly publicized corporate financial scandals earlier that decade. The act created strict new rules for accountants, auditors, and corporate officers and imposed more stringent recordkeeping requirements

2.The purpose of an accounting information system (AIS) is to collect, store, and process financial and accounting data and produce informational reports that managers or other interested parties can use to make business decisions.

3.The act requires that top managers personally certify the accuracy of financial reports.more responsibility is given to higher authorities in the management.

4.one of the objective is to minimise white collar crimes and impose high level of fines and penalty in case of any fraud.

Pls like if logic explained