Answer 1 to 7 based on page 5-33. Title I §101 of SOX establishes the Public Company Accounting...

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Answer 1 to 7 based on page 5-33.

Title I §101 of SOX establishes the Public Company Accounting Oversight Board (PCAOB.) Describe the composition of the Board and any limitations as to who may be appointed to the Board.
Visit the PCAOB Web site. http://www.pcaobus.org/ Find the sample registration form. Identify at least four pieces of information required from the applicant (CPA firm).
Visit the PCAOB Web site. http://www.pcaobus.org/ The PCAOB inspection reports are available to the public.
1. Find an inspection report for any firm you choose and briefly review the PCAOB’s findings.
2. Did the PCAOB find any audit deficiencies?
3. If so, on what issues?
Tax services are not specifically prohibited by SOX §201.
1. In your opinion, should tax services be included in the prohibited list of services in SOX §201?
2. Why or why not?
3. In your opinion, should it matter if it is tax compliance work (tax returns) versus tax consulting?
Can an auditor assist a client with design and implementation of an information system if the client company’s audit committee pre-approves the fees in accordance with SOX §202?
SOX §203 requires the engagement and reviewing partners to rotate off audit clients after five years. In your reasoned opinion, does audit partner rotation result in higher quality audits? Why or why not? You should find resources that address this issue on the Internet.
SOX §301 provides additional authority and requirements for corporate audit committees.
1. Describe the relationship between a company’s Board of Directors and the company’s audit committee.
2. Identify two audit committee responsibilities identified in SOX §301

8. Read Section 301 on pages 30 through 33 in the Student Guide.
9. Review the Investor Relations area of the Microsoft Web site. http://www.microsoft.com/msft/default.mspx

Does Microsoft have a procedure for employees or others to ask questions or report concerns about “...internal accounting controls, an accounting matter, or an auditing matter?”
If so, who (title of the person) responds to questions or concerns communicated?
Does Microsoft’s procedure seem to satisfy SOX section 301?

10. Identify the three certifications required by §302.
11. In your reasoned opinion, does §302 significantly increase the workload or responsibility of CEOs and CFOs? Why or why not?
12. SOX §402 was inspired in part by Tyco former CEO Dennis Kozlowski.

Google Kozlowski and read several articles or interviews.
How did he spend the money drained from Tyco?
If you were on the jury at his trial, how would you interpret his claim (made to Morley Safer on 60 Minutes, March 25, 2007) that the issue was just “a major pay dispute [?]”

13. Find the 2012 Annual report at the Investor Relations area of the Microsoft Web site. http://www.microsoft.com/msft/default.mspx

Read the Auditor’s Report in the Financial Review area.

What standards were used by the CPA firm to conduct the financial statement audit?
Find and read the certifications required by §302.
Find and read the auditor’s report required by §404.
What criteria were used by the auditors to conduct the audit of the internal control over financial reporting?

What are the two specifically cited “inherent limitations” that may not allow auditors to prevent or detect material misstatements due to error or fraud on a timely basis?

14. Visit the Investor Relations area of the Microsoft Web site. http://www.microsoft.com/msft/corporate/default.mspx

Find and read the code of ethics that meets the requirements of §406.
Which employees (by title or class) are subject to the code of ethics?

005_saza5o-0lk4p4mi.doc 005_axcza5o-bndrco3w.pdf

David · Accepted Answer

1. Title I §101 of SOX establishes the Public Company Accounting Oversight Board 
(PCAOB.)  Describe the composition of the Board and any limitations as to who may be 
appointed to the Board. 
The section 101 of the SOX’s Title 1 establishes the Public Company Accounting Oversight 
Board as one of the independent as well as nonprofit bodes for overseeing the audit of all the 
public companies which are subject towards the securities laws as well as related matters 
with a view towards protecting the interests of the investors and public. The SEC appoints all 
the board members along with exercising oversight as well as enforcement authority on it.    
2. Visit the PCAOB Web site.  http://www.pcaobus.org/  Find the sample registration form.  
Identify at least four pieces of information required from the applicant (CPA firm). 
The pieces of information required from the applicant in the sample registration form 
include: 
 Applicant profile 
 Identity of the applicant 
 Listing of applicant’s public company audit clients and related fees 
 Statement of applicant’s quality control policies 
 Listing of certain procedures involving the applicant 
 Listing of filings disclosing accounting disagreements with public company audit 
clients 
3. Visit the PCAOB Web site.  http://www.pcaobus.org/  The PCAOB inspection reports are 
available to the public.   
http://www.pcaobus.org/
http://www.pcaobus.org/
a. Find an inspection report for any firm you choose and briefly review the 
PCAOB’s findings.  
The firm chosen here is BSR & Co. headquartered in Mumbai, India. The review 
from SEC did not identify any issues related to audit performance that, towards the 
inspection team's view, might have resulted towards the Firm failing towards 
obtaining sufficient competent as well as evidential matter for fulfilling the objectives 
of its role towards the engagements. 
b. Did the PCAOB find any audit deficiencies?  
No, the review from PCAOB did not find any audit deficiencies from the review of 
BSR & Co.  
c. If so, on what issues? 
No such issues were found.  
4. Tax services are not specifically prohibited by SOX §201.  
a. In your opinion, should tax services be included in the prohibited list of services 
in SOX §201?   
No, I am not in the view that the tax services be included in the prohibited list of 
services in SOX section 201. 
b. Why or why not?   
Companies require tax services to file their tax returns. Also, the auditors that audit 
the financial of the company have studied that entire financial position of the 
company and are in a better position to advise them on the taxation matters.  
c. In your opinion, should it matter if it is tax compliance work (tax returns) versus 
tax consulting?   
Tax consulting services should be provided by the auditors however it the rule needs 
to make sure that auditors are not advising ways to evade tax to their clients.   
5. Can an auditor assist a client with design and implementation of an information system if 
the client company’s audit committee pre-approves the fees in accordance with SOX 
§202?  
Yes, an auditor can assist a client with design and implementation of an information system 
if the client company’s audit committee pre-approves the fees in accordance with SOX §202.

Answer 1 to 7 based on page 5-33. Title I §101 of SOX establishes the Public Company Accounting Oversight Board (PCAOB.) Describe the composition of the Board and any limitations as to who may be...

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