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Public Company Accounting Oversight Board (PCAOB)



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Public Company Accounting Oversight Board (PCAOB). SOX created the Public
Company Accounting Oversight Board (PCAOB) to control the auditing profession. The PCAOB sets and enforces auditing, quality control, ethics, independence, and other auditing standards. It consists of 5 people who are appointed by the Securities and Exchange Commission (SEC
New rules for auditors. Auditors must report specific information to the company’s audit committee, such as critical accounting policies and practices. SOX prohibits auditors from performing certain nonaudit services, such as information systems design and implementation. Audit firms cannot provide services to companies if top management was employed by the auditing firm and worked on the company’s audit in the preceding
12 months.
belief system - System that describes how a company creates value, helps employees understand management’s vision, communicates company core values, and inspires employees to live by those values.
boundary system - System that helps employees act ethically by setting boundaries on employee behavior.
diagnostic control system - System that measures, monitors, and compares actual company progress to budgets and performance goals.
interactive control system - System that helps managers to focus subordinates attention on key strategic issues and to be more involved in their decisions.
Foreign Corrupt Practices Act
(FCPA)
- Legislation passed to prevent companies from bribing foreign officials to obtain business also requires all publicly owned corporations maintain a system of internal accounting controls.
Sarbanes–Oxley Act (SOX)
- Legislation intended to prevent financial statement fraud, make financial reports more transparent, provide protection to investors, strengthen internal controls at public companies, and punish executives who perpetrate fraud.
Public Company Accounting Oversight Board (PCAOB)
- Aboard created by SOX that regulates the auditing profession created as part of SOX.

PART II CONTROL AND AUDIT OF ACCOUNTING INFORMATION SYSTEMS

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