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Big4Guy: Using the Work of Others in Sarbanes Oxley Compliance

Big4Guy: Using the Work of Others in Sarbanes Oxley Compliance

by Rick Turoczy on June 21, 2006

Under Sarbanes Oxley an auditor must test the operating effectiveness of internal controls over financial reporting to form an opinion on financial statements. Primarily the auditor should use the results of his own testing in forming such opinion. This means that the tests of operational effectiveness conducted by the auditor will form the basis of the auditor’s opinion. However, SOX allows auditors to use the work of others to alter the nature, timing and extent of procedures performed independently.

So what does “Work of Others” mean here? For SOX purposes, work of others means work perfomed by company’s internal auditors, consultants, other company personnel, and third parties working under the direction of the management or audit committees. In using the work of others, auditors must take into consideration the following…

Big4Guy: Using the Work of Others in Sarbanes Oxley Compliance

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