Linking the SOX Compliance Process to the PCAOB's Audit Standard No 5 to Maximize Compliance Cost-Effectiveness

摘要

Many organizations obligated to meet the dictates of the Sarbanes-Oxley Act have tended to focus on how to achieve compliance by trying to interpreter the mandates of the Act. However, most did not take into account how the external auditor would approach the mandated vetting process of the internal control for financial reporting that was reported by the issuer's senior management. Since the independent auditor's pronouncement essentially determines whether an issuer is complying with the tenets of the SOX act, ignoring the viewpoint of the external auditor in vetting and testing the company's internal controls is not a smart approach to follow. The recent issuing of the new Audit Standard 5 by the Public Company Accounting Oversight Board offers a good opportunity for companies (especially small ones) to adopt the principles in AS 5 to guide them in their internal compliance process to save in audit and compliance costs.