How the 2002 Sarbanes-Oxley Act Affects Regional CPA Firms

Presenter Information

Irina Kansakar, Minnesota State University, Mankato
Kaitlyn Moll, Minnesota State University, Mankato
Krista Gillen, Minnesota State University, Mankato

Location

CSU 201

Start Date

24-4-2007 8:15 AM

End Date

24-4-2007 10:30 AM

Student's Major

Accounting and Business Law

Student's College

Business

Mentor's Name

Thomas Olach

Mentor's Department

Accounting and Business Law

Mentor's College

Business

Description

Section 404 of the Sarbanes-Oxley Act (SOA), passed in 2002, requires Certified Public Accountant (CPA) firms to verify management's evaluation of internal controls while simultaneously auditing the company's financial statements. Section 404 has resulted in increasingly complex compliance procedures and closer scrutiny over internal controls for both managers and auditors. This new requirement may be costly and require additional resources from both CPA firms and their clientele. The increase in costs and resources may be more burdensome if companies employ CPA firms that lack the necessary skills to perform Section 404 compliance work. This research seeks to determine if regional CPA firms are up-to-date with Section 404 compliance and what significant issues they have encountered since the Section's passing. If results indicate that regional CPA firms are in need of further guidance regarding Section 404, regional educational institutions and CPAs knowledgeable of Section 404 requirements may help assist firms and their clientele by offering seminars, workshops, and/or conferences to enhance their skills in meeting Section 404 requirements. Furthermore, an indication that CPAs are lacking in knowledge of Section 404 may suggest that it is time for universities to add more instruction regarding Section 404, and/or the SOA, to their undergraduate and graduate degree business program curriculums.