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Sarbanes Oxley Act -
Auditing Standards |
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Public
Company Accounting Oversight
Board
Bylaws
and Rules – Standards, AS2
Auditing
Standard No. 2: An Audit of Internal Control
Over Financial Reporting Performed in
Conjunction With an Audit of Financial
Statements
This standard was approved by the
Securities and Exchange Commission on June 17,
2004, and is effective for audits of internal
control over financial reporting required by
Section 404(b) of the Sarbanes-Oxley Act of
2002.
Applicability of
Standard
1.
This standard establishes requirements and
provides directions that apply
when
an
auditor is engaged to audit both a company's
financial statements and
management's
assessment of the effectiveness of internal
control over financial
reporting.
Note:
The term auditor includes both public accounting
firms registered with the
Public
Company Accounting Oversight Board ("PCAOB" or
the "Board") and
associated
persons thereof.
2.
A company subject to the reporting requirements
of the Securities Exchange Act
of
1934 (an "issuer") is required to include in its
annual report a report of
management
on
the company's internal control over financial
reporting. Registered
investment
companies,
issuers of asset-backed securities, and
nonpublic companies are not
subject
to the reporting requirements mandated by
Section 404 of the
Sarbanes-Oxley
Act
of 2002 (the "Act") (PL 107-204).
The
report of management is required to contain
management's assessment of the
effectiveness
of the company's internal control over financial
reporting as of the end
of
the company's most recent fiscal year, including
a statement as to whether the
company's
internal control over financial reporting is
effective.
The
auditor that audits the company's financial
statements included in the
annual
report is required to attest to and report on
management's assessment. The
company
is required to file the auditor's attestation
report as part of the annual
report.
Note:
The term issuer means an issuer (as defined in
Section 3 of the Securities
Exchange
Act of 1934), the securities of which are
registered under Section 12 of
that
Act, or that is required to file reports under
Section 15(d) of that Act, or
that
files
or has filed a registration statement with the
Securities and Exchange
Commission
("SEC" or "Commission") that has not yet become
effective under
the
Securities Act of 1933, and that it has not
withdrawn.
Note:
Various parts of this standard summarize legal
requirements imposed on
issuers
by the SEC, as well as legal requirements
imposed on auditors by
regulatory
authorities other than the PCAOB. These parts of
the standard are
intended
to provide context and to promote the auditor's
understanding of the
relationship
between his or her obligations under this
standard and his or her
other
legal responsibilities. The standard does not
incorporate these legal
requirements
by reference and is not an interpretation of
those other
requirements
and should not be so construed. (This Note does
not apply to
references
in the standard to the existing professional
standards and the Board's
interim
auditing and related professional practice
standards.)
3.
This standard is the standard on attestation
engagements referred to in
Section
404(b)
of the Act. This standard is also the standard
referred to in Section
103(a)(2)(A)(iii)
of the Act. Throughout this standard, the
auditor's attestation of
management's
assessment of the effectiveness of internal
control over financial
reporting
required by Section 404(b) of the Act is
referred to as the audit of
internal
control over
financial reporting.
Note:
The two terms audit of internal control over
financial reporting and
attestation
of management's assessment of the effectiveness
of internal control
over financial
reporting refer to the same
professional service. The first refers
to
the
process, and the second refers to the result of
that process.
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