SOX Section 404 Consulting Essay Example | Topics and Well Written Essays - 750 words

SOX Section 404 Consulting - Essay utilizationSection 404 is the key aspect of SOX ithighlydemands the external auditors and commission of a telephoner toemphasison reporting of financial statements. Thisprocessturns out to be the most approachlyprocesses among all requirements laid down in the mouth by thelegislationfor companies. This is because testing and documenting of paramount automated andmanualfinalfinancial statements is highly sensitive. downstairs this section, the practise requiresmanagementtoavailan intimate controlreport together with annual Exchange Act report. The report encompasses theroleofmanagementin putting down theprocedureand procedures of the internal control system. This is because their dexteritydictates theadequacyof the financial statements (Ramos, 2008, p 23). This section contains anassessmentof the company after the financial year, including theestablishmentand aid of the control system. Thesectionalso includes thelevelofeffectivenessof the con trol system is reporting the audit scope. The management has to adopt the internal control systems described in international auditing standards. In reference to Apollo Shoes Company, the cost elevation, guidance, andpracticeis taking place. There is acompilationof approvals made by the Public Company bill Oversight Board. All this activities ensure there is a fair representation of the sh beholders by the management. Significant regulations and guidelines regarding audits of internal control It isevidentthat the internal controls of Apollo Shoes are above average. As a progeny, there are few recommendations needed to meet the set standards. The company should ensure that all employeesrespectthe internal controls in order to meet the set standards. It isnoticeablethat many employees hardlyfollowthe setprocedureto proficientthe assets of the company. We alsoproposethat the relationship mingled with the internal auditors andmanagementis nothealthy therefore, the audit direction s hould have a sitting toresolvethis arising issue. Through this,companyis going toenhanceauditors independence (Ramos, 2008, p. 23). Risks place within the company In Apollo Shoes Company, there are few areas open torisk. This is a result of negligence on the employees. After a detailed evaluation of the company, it isevidentthat Apollo Shoes is a company that has identified itself in terms of quality control systems. This is acomplementthat goes to the internal auditors. However, there are gaps which may go along to material misrepresentation in the financial statements. One of the key areas is the procedure followed in completing a transaction. For a company topreventghost transactions, there should be many signatories between initiation and completion of a transaction. Anidealexampleis when a potential buyer places an order the caller receiving thenoticeshould be different from that processing theorder. The ships company processing theordershould be different from the party ar ranging thedispatch, andlastlythepartydeliveringgoodsshould be different from the other parties. In reference to the audit report, unavowedaccounts have a weak securitysystem. The system is using out of date technology, and this may lead to unhealthy competition. The company should adopt new technology to enhance secrecy, andprotectionof ideas. Examples of these technologies include biometric security systems, and the novelbusinesssolution such as the SAP models. These solutions make use of integrated ITknowledgethat is needy from hacking and other mal-handling. Other areas thatneedconcentration arestockcounting, depreciation andappreciationcalculation, andbasis git activities such as bonuses, retirement pension, writing off bad-debts, and disposal of assets, among others. inside controls and theauditprocess Internal controls determine the