Tag Archive: SOX Compliance

The Differences Between SOX 302 and 404 Requirements

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The Sarbanes-Oxley Act of 2002 (SOX) is a law that implements regulations on publicly traded companies and accounting firms. SOX was created to improve the accuracy and reliability of corporate disclosures in financial statements and to protect investors from fraudulent accounting practices.  While the act consists of eleven titles, a significant amount of SOX requirements live within Section 302 and Section 404. These SOX compliance activities include the identification and testing of internal controls over the financial reporting process. Plus, they require the submission of specific financial certifications in quarterly and annual reports to the United States Securities and Exchange Commission (SEC).  Although these Sarbanes-Oxley sections are interrelated, there are differences between their specific requirements as well.  SOX Section 302…

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Sox Management Review Controls

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The Sarbanes-Oxley Act of 2002 (SOX) designates management review controls (MRCs) as one of the required internal controls. MRCs are the reviews of key financial information conducted by a company’s management to assess its reasonableness and accuracy. They are a key aspect of a public company’s internal control over financial reporting (ICFR).  Examples of these SOX management reviews include:      Review of reconciliations     Review of journal entries     Trigger events     The work supporting an estimate     Budget to actual variances  Management review controls are more complex than other controls since they require the examination of combined results as opposed to individual transactions. They involve comparisons of recorded amounts with associated projections based on…

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