Question

True/ false

1. Section 404 of the Sarbanes Oxley - law requires the partner of the CPA firm auditing a company to take responsibility for the company’s internal controls.

2. The name of the PCAOB is Public Company Accounting OverSight Board.

3. The Sarbanes Oxley act strengthened auditor independence by requiring audit committees to appoint the auditors.

4. Section 404 of the Sarbanes Oxley law requires that both the company management and the CPA firm auditing the company issue a report on the company’s internal controls.

5. The chair of the PCAOB must be a partner in a CPA firm.

Answer 1

1. False

As per Sec 404 of SOX, management is responsible for the company‘s internal control not the auditor. Auditor will attest the report on internal control.

2. True

PCAOB- Public Company Accounting Oversight Board

3. True

SOX strengthened auditor independence by empowering audit committee to directly appointment of auditor.

4. False

As per Sec 404(b) of SOX, management is responsible for the company‘s internal control not the auditor. Auditor will attest and issue report to SEC on internal control.

5. False

PCAOB is 5 members’ boards which must have 2 members from CPA firm but it does not mandate to have Chair of PACOB from CPA firms.