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Article: Taking control of internal controls: the 411 on Sec. 404.(sarbanes-Oxley Act)(Cover Story)
- Article from:
- California CPA
- Article date:
- July 1, 2004
- Author:
CopyrightCOPYRIGHT 2004 California Society of Certified Public Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The text of the Sarbanes-Oxley Act, Sec. 404, Management Assessment of Internal Controls, contains only 173 words. But in its practical application, it contains so much more.
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Sec. 404 requires publicly traded companies to include in their annual report an assessment of the effectiveness of their internal controls over financial reporting and the accompanying auditor's report.
Though designing and maintaining a company's controls always has been the purview of management, Sec. 404 adds the tasks of annually evaluating, testing and reporting on internal controls. And, as most companies grappling with Sec. 404 can tell you, ...