public org as first risky entity 2961



  • Hi all
    i want to understand why the sox in general focus on public entity
    and relationship with the gov?
    finaly the fraud or such risk may come from anyone, public or private
    thanks for an answer
    sel



  • I’m not sure if I understand what you’re asking, but I’ll take a stab.
    SOX focuses on Public Companies because investors world-wide have money in these companies. SOX, for US companies, is just another federal regulation aimed at forcing these companies to do their due diligence to put proper controls in place…some of which mitigate fraud.
    SOX arose from frauds committed by top management in some very large companies and investors lost a lot of money. These executives overrode various controls to influence the account treatments and subsequently the EPS of their companies to meet analyst projections, reaping huge bonuses as their stock based comp plans ballooned.
    SOX, though linked to fraud, is not solely aimed at mitigating fraud. It’s aimed at making sure companies have proper control’s in place to make sure companies are operating efficiently, effectively, and understand their business as they should.



  • SOX, though linked to fraud, is not solely aimed at mitigating fraud. It’s aimed at making sure companies have proper control’s in place to make sure companies are operating efficiently, effectively, and understand their business as they should.
    I disagree. SOX does not address operational controls, only financial reporting and fraud controls. Management can be as inefficient as possible, but if they have good controls around fraud and financial reporting and report results properly, then they have met the SOX requirements.



  • Well, that is true. But the spot light put on controls, has put an increased emphasis on all controls. Perhaps an unintended benefit, but a benefit none the less.



  • Hi all
    sorry for the delay
    would you allow me to insist
    even though your argue, the fraud don’t remain the characteristic of public entity but still also possible within private huge entity, and what about the lobbies, cartel, …etc
    thank you for feedback


Log in to reply