Please discuss the impact of the Sarbanes-Oxley Act on the AIS's
of small public companies. Remember, some public companies are so
small that they have only a few employees.
Thoughts to consider:
1. Is compliance worth it? Maybe better to go private?
2. What are the AIS requirements for SOX compliance for small
public companies?
3. Can you find any examples on the web?
4. Do you have any personal experience with the issue?
5. Is using an ASP (Application Service Provider) always the best
choice? When is it, and when is it not?
6. What are some specific software options? How will those options
assist with compliance?
7. How do the various standards (e.g., COBIT) relate to small
public companies?
Please answer the above discussion
The impact of SOX on Small Business :
The legislation has had a significant impact on business especially smll companies looking to grow and expand their operation . What is SOX requirement ? SOX wants company should implement strong segregation of duties . This mean One person can not be involved in all work and can not do misutilization of fund and money
Major challenge to implement SOX in small companies is COST . Increase in Operating cost when small companies are meeting SOX requirement . Small Business must develop their own Internal control system strong and develop Internal Auditor who can review internal process , operating activity and safeguard assets
In 2002 , SOX act implemented mainly for safeguard of Investor . This legislation relates to business and accounting practices of publicly help companies.
So Private company or small company who does not have plan to move to Public no need to implement SOX compliance
In case of small companies they need to look into two important factor – 1 ) Whistleblower policy 2) code of Ethics
Private as well as Small companies main concern is cost to implement compliance regulation
Connection – Effectiveness of COBIT in case of Small Companies – Before give answer the above , We need to first identified the importance of COBIT – COBIT is a guideline to ensure Quality, control, reliability of data , information system in any organization .COBIT mean control Objective for Information and related Technology . It is framework developed by ISACA . How small business will gain after use this COBIT: While small company at growing stage , appropriate governed IT facility minimise the risk and maintain at appropriate level of agility . This good governance ensue that the board is more familiar with IT function and make proper strategic plan . With help of COBIT , the organization must identify about needs from IT and how expansion can help to meet those needs
COBIT 5 provide more structured process to smooth transaction and ensure that growth is possible with knowledge , disciplined and engaged Board also
This COBIT 5 definitely help to set up a structured process to smooth the transition and develop framework and provide continual improvement in Life cycle
Application service Provider – ASP main advantage included reduced IT Capital Expenditure and easy software and hardware maintenance . ASP is a business providing computer based service to customer over a network . ASP is good in general sense because it provides low cost package solution via theor own website
Please discuss the impact of the Sarbanes-Oxley Act on the AIS's of small public companies. Remember,...
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CEO Billy Jean has heard that due to the Sarbanes–Oxley Act, costs have increased significantly when operating a public company. Jean is especially apprehensive with reports that he can anticipate double the audit fees due to the internal control provisions of the Act and PCAOB Auditing Standard No. 2201. Jean has asked you to explain how the Sarbanes–Oxley requirements may affect the audit. Required: Organize and share your thoughts if the company decides to go public. How would complying with...
Prior to beginning work on this discussion forum, visit the The Sarbanes-Oxley Act 2002 (Links to an external site.) Search the Internet and locate an annual financial report for a public U.S. company. Read the “Notes” to the Financial Statements to determine the criteria for cash equivalent and how cash and cash equivalents are handled. In your initial post, you will discuss your findings. Find information about the internal control policy of the company and summarize this policy in your...
Prior to beginning work on this discussion forum, visit the The Sarbanes-Oxley Act 2002 (Links to an external site.) Search the Internet and locate an annual financial report for a public U.S. company. Read the “Notes” to the Financial Statements to determine the criteria for cash equivalent and how cash and cash equivalents are handled. In your initial post, you will discuss your findings. Find information about the internal control policy of the company and summarize this policy in your...
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Prior to beginning work on this discussion forum, visit the The Sarbanes-Oxley Act 2002 (Links to an external site.) Search the Internet and locate an annual financial report for a public U.S. company. Read the “Notes” to the Financial Statements to determine the criteria for cash equivalent and how cash and cash equivalents are handled. In your initial post, you will discuss your findings. Find information about the internal control policy of the company and summarize this policy in your...
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