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Call for auditors to give verdict

Call for auditors to give verdict

by Rick Turoczy on January 12, 2005

Auditors could be given the right to more quickly reassure investors that companies have fixed weaknesses in systems that ensure accurate financial reporting, regulators said on Wednesday.

Douglas Carmichael, chief auditor at the Public Company Accounting Oversight Board, told a conference that the regulator was considering whether auditors should have the ability to give snap verdicts on remedial action taken by companies on defective internal financial controls.

Companies were warned that investors and credit rating agencies could react badly to poor disclosures by companies about any weaknesses.

Disclosures by companies about the effectiveness of internal controls are mandated by the Sarbanes-Oxley Act, and auditors must give separate opinions.

The first batch of reports are due to be filed with the Securities and Exchange Commission in March and April.

Call for auditors to give verdict

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