November 04, 2004
Investor Confidence has to be Restored
If publicly held companies had continued reviewing internal contrals as they used to, 25 years ago, the expense being absorbed now would be nil. However, with the desire to reduce audit fees, risk based auditing came into fashion. Internal Controls were not reviewed and really became "immaterial". Therefore, we are paying the price for years on neglect in this important area.
An excerpt on internal control review is here:
"Section 404 is such an important part of restoring investor confidence that it is worth the cost,'' McDonough, 70, said at an August press conference in Washington.
The board will audit the work of the biggest four accounting firms every year and examine the performance of smaller auditors on a rotating basis. That surveillance replaced a system of ``peer review'' in which the firms monitored one another. The law also gave board audit committees, instead of management, the power to hire and fire auditors.
``The law has put accounting in a spotlight,'' says Charles Niemeier, a member of the oversight board.
Investor confidence was shaken by the scandals at Enron, WorldCom and Tyco, which the accounting firms themselves failed to uncover and in some cases encouraged."
For the complete article, click here.
To reduce costs and effectively comply with Sarbanes-Oxley, see www.issuescentral.com for more information.
An excerpt on internal control review is here:
"Section 404 is such an important part of restoring investor confidence that it is worth the cost,'' McDonough, 70, said at an August press conference in Washington.
The board will audit the work of the biggest four accounting firms every year and examine the performance of smaller auditors on a rotating basis. That surveillance replaced a system of ``peer review'' in which the firms monitored one another. The law also gave board audit committees, instead of management, the power to hire and fire auditors.
``The law has put accounting in a spotlight,'' says Charles Niemeier, a member of the oversight board.
Investor confidence was shaken by the scandals at Enron, WorldCom and Tyco, which the accounting firms themselves failed to uncover and in some cases encouraged."
For the complete article, click here.
To reduce costs and effectively comply with Sarbanes-Oxley, see www.issuescentral.com for more information.
