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Sarbanes-Oxley addresses the handling of complaints regarding accounting,
internal controls,
or auditing matters.
The reports are in aggregate and individually directed to the
audit committee. The aggregate report is available monthly, while
the individual reports are sent within 36 hours of receipt. Click
here to view an example of individual and aggregate
report.
Defining Accounting, Internal Controls, and
Auditing.
Additional definitions of accounting terms may be
found at www.inoptra.us.
| Accounting |
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The process of identifying, recording, and communicating the economic events
of a business to interested users of the information.
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Reports
The formats used to accurately display financial information.
(Example: the financial statements and budget are prepared
for a distinct time period to display the results/projections
of all economic transactions.)
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Principles
Guidelines used to ensure universal techniques are used
in recording financial information. (Example: the use of
historical cost as the basis for recording a transaction.)
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| Internal Controls |
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The methods or procedures used by an organization to:
- Ensure reliability and integrity of information;
- Ensure compliance with policies, laws, regulations, etc.;
- Safeguard assets;
- Promote economical and efficient use of resources;
- Accomplish goals and objectives.
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Preventive
Designed to discourage errors or irregularities from occurring.
(Example: processing vouchers only after signatures have
been obtained from appropriate personnel.)
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Detective
Designed to find errors or irregularities after they have
occurred.
(Example: reconciling FIS Monthly Detail Reports
to departmental records.)
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| Auditing |
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Auditing is the examination of a company’s financial statements, to see whether the
statements are presented fairly. Including the:
- Process of accumulating evidence by a competent independent person about
- Quantifiable information and
- Determining the degree of correspondence between the information and established standards.
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General Standards
Auditor has adequate training and proficiency as an auditor,
independence in mental attitude, and due professional care.
(Example: Auditor does not own shares of stock in the company.)
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Field Work Standards
Work is adequately planned and assistants are properly supervised,
as well as involve the understanding of internal control
structure in order to determine the nature, timing, and
extent of tests obtained in a sufficient, competent, and
evidential matter.
(Example: All account receivables will be confirmed for accuracy.)
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Report Standards
The report shall state whether the financial statements
are presented in accordance with GAAP. The report shall
identify those circumstances in which such principles have
not been consistently observed in the current period in
relation to the preceding period.
The report shall contain either an expression of opinion
regarding the financial statements taken as a whole, or
an assertion to the effect that an opinion cannot be expressed.
(Example: An unqualified opinion is determined and released
for the company annual report.)
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Report Home Page
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Report Sub Page
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