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Learning Team Discussion Question

Week 4 LT Discussion Question

Which companies or industries are required to have internal controls for computer access under Sarbanes-Oxley regulations?

Traditionally, internal controls were the internal auditor field of the expertise and limited mainly to concerns such as segregation of duties over the bank account. However, failures of controls on an immense scale have altered the representation. Chief executive officers (CEOs) of publicly traded companies are quickly becoming gurus on internal controls and internal controls are now an important topic for all businesses and auditors. Thanks to the emphasis of regulatory action under the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), consideration has been concerted on the more limited field of internal controls over financial reporting. The area of internal controls encompasses all of the internal processes, checks, and balances that an organization employs in the attempt to guarantee that it meets its goals. Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) requires a public company's management to evaluate periodically, and report annually upon, the effectiveness of internal controls over financial reporting. Management's report must be supplemented by an assessment of the external auditor corroborating to the reliability of management's conclusions. The retail industry, bank industry, and insurance industry are required to have internal controls for computer access.

The practical thinking of the SOX law was to meet consumer demand with the outrageous behavior of auditors, accountants, and corporations in reporting accurate financial information for the consumers to make wise decisions. The Sarbanes-Oxley law allows this monitoring of corporations and the split of traditional accounting firms from the audit duties that used to be performed by both companies. This lead to WorldCom, Enron, and Tyco being bankrupt companies that were built and operated on fraudulent numbers...