Sarbanes-Oxley (SOX) Standards - Evolution 2 CPE

Generally Accepted Auditing Standards (GAAS) are Standards against which the quality of audits are performed and judged.  In the U.S., Standards are promulgated by the Auditing Standards Board (ASB), a division of the American Institute of Certified Public Accountants (AICPA).  Since the passage of the Sarbanes-Oxley Act of 2002 (SOX), the Public Company Accounting Oversight Board (PCAOB) has developed standards for publicly traded companies.  Sections 103(a)(2)(A) and SOX 404(b) of the SOX Act directed the Board to establish Professional standards governing the independent auditor's attestation and reporting on management's assessment of the effectiveness of Internal Control Over Financial Reporting (ICFR).

Auditing Standard 2 (AS2) was the initial standard released to provide public accounting firms guidance regarding the requirements to comply with Sarbanes Oxley. Due to the many difficulties faced by firms and issuers in the early years of compliance, the PCAOB released Auditing Standard 5 (AS5) in 2007 which superseded AS2. AS5 was designed to provide clearer guidance and eliminate some of the questions that had plagued firms and companies through the initial years of attestation. AS5 is the current auditing standard for SOX compliance. However, it is important to have an understanding of AS2, it’s expectations and challenges be able to appropriately scope and understand the transition to AS5. This course will provide an outline of both legislations and highlight the challenges and applications of the SOX standards. It is important for professionals to have a strong understanding of the concepts outlined in both auditing standards and the impetus for change that resulted in AS5. This course is designed to provide a strong understanding of these concepts.

Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.

Note: The concepts outlined in this course are up to date and relevant in regards to the Sarbanes-Oxley legislation. Although there have not been any changes in the legislative concepts of the law since it’s release in 2002, some aspects of executing the work have evolved. This speaker is preparing a series of courses titled “Sarbanes-Oxley 20 years later”. Those courses can be found individually on the platform and would be beneficial for anyone involved with compliance.

NOTE: The Instructor has created 5 new segments on Sarbanes-Oxley Update - 20 Years Later:
Sarbanes-Oxley Update - 20 Years Later: Accounting Risk Assessment Considerations
Sarbanes-Oxley Update - 20 Years Later: Sourcing Emerging Risks Part 1
Sarbanes-Oxley Update - 20 Years Later: Evaluating Testing Processes
Sarbanes-Oxley Update - 20 Years Later: Sourcing Emerging Risks Part 2
Sarbanes-Oxley Update - 20 Years Later: Examining Fraud Risks

Prerequisites

No Advanced Preparation or Prerequisites are needed for this course. 

Learning Objective

• Explore the background of the Sarbanes-Oxley Act of 2002 (SOX) and recognize the purpose of SOX audit standards.
• Explore Auditing Standard 2 (AS2).
  • Management assessment process, Top down approach
  • Fraud, Terms, Entity level controls and walkthroughs
• Explore Auditing Standard 5 (AS5).
  • Key changes, Top down approach
  • Entity controls, Significant Accountants, Definitions
• Explore the Next Phase - The 2013 Committee of Sponsoring Organizations (COSO) Framework.

Last updated/reviewed: March 12, 2024