On IT Control Weaknesses in Auditors’ Reports on Internal Control

By analysing auditors’ SOX 404 reports from 2004 to 2009 we find after 2006 that reporting of information technology control weaknesses (ITWs) decreased significantly, primarily by Big 4 firms. This change appears to reflect Big 4 reporting practices in response to a change in auditing standards rather than the nature of Big 4 clients’ internal control systems, suggesting that SOX 404 auditors’ reports have become less informative. We find associations between ITW reporting and both non-ITW and financial misstatement reporting are moderated by auditor type and time period (2004-2006 vs. 2007-2009). Based on frequency of reporting, the relative ordering of individual ITWs, while differing over time, is similar over auditor type, company size and industry. We identify a small number of non-ITWs in SOX 404 reporting that may hold practical implications for an auditor’s consideration of IT control testing and an educator’s teaching of IT and non-IT controls

An Effectiveness Review of Section 404 of the Sarbanes Oxley Act (2002)

The accounting scandals that occurred in the early 2000s launched the current day regulations set fourth in the Sarbanes Oxley Act. The Sarbanes Oxley Act is comprised of several titles, all aimed to help eliminate financial accounting errors and the potential of fraud. Within this piece of legislation, there is one section that has created a lot of discussion. Section 404, which discusses the way in which disclosures of internal control deficiencies are handled, is the topic of this paper. In addition to a literature review of a research paper written by Sarah Rice and David Weber, this paper will look at different elements to see if this section of the Sarbanes Oxley Act has changed the regulatory environment. Through comparative studies, this paper is aimed to see if the legislation created to stop these financial scandals from happening, was successful and effective

Guidance on the self-assessment of a provider’s financial management and control arrangements using the financial management and control evaluation (FMCE) return: version 2, november 2010

This guidance has been prepared for the providers that the Skills Funding Agency takes the “lead” for on assurance matters. However, it is also equally applicable to those providers that the YPLA directly funds and l takes the “lead” for on assurance matters, that is, independent specialist colleges, sixth form corporations designated under the Apprenticeships, Skills, Children’s and Learning Act 2009 (local authorities) and certain non-college providers. The provider guidance in respect of the completion of the Financial Management and Control Evaluation (FMCE) return was previously prepared by the Learning and Skills Council (LSC). However, in accordance with the Apprenticeships, Skills, Children’s and Learning Act 2009 the Skills Funding Agency, the YPLA and local authorities1 took over the funding of further education, and the various responsibilities attached to this, with effect from 1 April 2010. As part of these new arrangements, the Chief Executive of Skills Funding has taken on board the responsibility of updating and developing the FMCE return and the associated provider guidance