From The Implementation Of The Sarbanes - Oxley Act (sarbanes-oxley Act), "the Talk About The Governance Of Large U.s. Company's Internal Control

The Implement of Sarbanes-Oxley Act ---- The internal control framework of American Company* Background and target of this paperThe widely publicized financial accounting scandals impacting several major U.S. corporations have prompted the U.S. Congress to enact a new law, which changes how American companies must conduct business. This new law, referred to as the Sarbanes-Oxley Act, impacts Board of Directors and Audit Committee activities, the role of external auditors, and the responsibility and accountability of management.The issues of Enron and other corporations highlighted weaknesses in how companies establish controls over authorizing and processing business transactions. The system of checks and balances, known as the internal controls environment, has been an area of focus of this new law. Internal control is addressed in Section 404 of the law.The new law requires the CEO and CFO to certify that they have reviewed its internal control environment and determined that this environment is working as intended. The CEO and CFO will need to make this certification as of December 31, 2003, and it will become part of each company's Annual Report. The external auditors are then required to agree or disagree with this assessment.The 404 project will enable each company to review significant business transactions authorized, accounted for and reported in the financial records of the Company. Any weaknesses will need to be addressed to ensure that there are no significant deficiencies.The Steering Committee was asked to work with external auditors to develop an implementation plan. In developing this plan, they have strived to minimize the disruption to operations, potential conflicts with budgets and monthly closing cycles and vacation schedules.The target of this paper is to studying how the American company act after the publication of Sarbanes-Oxley Act. And show the changes on the internal control framework .This paper will be helpful to Chinese legislative and the management of stock market and, especially, for Chinese company.* The logic structure of this paper This paper chooses one American Company, which is one of fortune 500 company, an international company as a sample.Six parts make up of this paper:1. The background of the publication of Sarbanes-Oxley Act and the impact to American company.2. The internal control framework of American Company before the publication of Sarbanes-Oxley Act.2.1. Quarterly Attest 2.2. Seg duties questionnaires 2.3. The self test of internal control3. The changes on internal control framework of American company after the publication of Sarbanes-Oxley Act.3.1. The implement time plan3.2. The action over world3.3. The internal control 300 Questionnaires 3.4. ICQ exception report -compensating control and corrective actions 4. Steps in branches over world.4.1. Plant level process narrative 4.2. Sales and A/R4.3. Bad debt4.4. Cash4.5. Branches management5.The estimate for internal control framework of American Company and Sarbanes-Oxley Act6. The revelation for Chinese company and legislative 6.1. The timing and preceding of the law6.2. The handle of the law* The method of this paperThe method of this paper is Empirical Analysis.* The contribution this paperThere are many papers were written in theoretically about the function and impacts of Sarbanes-Oxley Act. This paper wants to study the company's operations in the micro -level. And hope it will be helpful to Chinese legislative and the management of stock market and, especially, for Chinese company.