The SOX 404 Internal Control Audit: Key Regulatory Events

Posted: 28 Sep 2016

See all articles by Chan Li

Chan Li

University of Kansas

K. K. Raman

The University of Texas at San Antonio

Lili Sun

University of North Texas - Department of Accounting

Da Wu

University of North Texas, Department of Accounting, Students

Date Written: 2015

Abstract

Section 404b of the 2002 Sarbanes Oxley Act (SOX) requires auditors to attest to the effectiveness of a client’s internal control over financial reporting (ICFR). In this paper, we provide an overview of key regulatory events in the implementation of the 404 internal control audit. We discuss the early years (under Auditing Standard No. 2) as well as the later years (under Auditing Standard No. 5) of the 404 audit, emphasizing areas of improvement in the efficiency and effectiveness of the audit as well as the remaining problems and challenges highlighted in PCAOB inspection reports and practice alerts. Finally, we address recent regulatory developments pertinent to the 404 audit such as Auditing Standard No. 12 and the recent 2013 update to the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) internal control framework.

Keywords: SOX 404 audit, internal control

Suggested Citation

Li, Chan and Raman, K. K. and Sun, Lili and Wu, Da, The SOX 404 Internal Control Audit: Key Regulatory Events (2015). Research in Accounting Regulations, Vol. 27, October 2015. Available at SSRN: https://ssrn.com/abstract=2842799

Chan Li

University of Kansas ( email )

Capitol Federal Hall
Lawrence, KS 66045
United States
7857661277 (Phone)
66045 (Fax)

K. K. Raman (Contact Author)

The University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)

Lili Sun

University of North Texas - Department of Accounting ( email )

1155 Union Circle #305219
Denton, TX 76203-5017
United States
940-565-3077 (Phone)

Da Wu

University of North Texas, Department of Accounting, Students ( email )

Denton, TX
United States

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