| Summary: | 碩士 === 國立臺北大學 === 會計學系 === 95 === Soon after several financial scandals such as Enron and WorldCom occurred since 2001, the Sarbanes-Oxley Act (SOX) was signed into law in 2002 to prevent corruptions occurring again. It imposes added restrictions on internal controls such as section 302 and section 404. Section 404 has made a great impact on corporations. According to section 404, issuers are required to publish information in their annual reports concerning the scope and adequacy of their internal control structures and procedures. CPA firms shall attest to their assessment of the effectiveness of the internal control structures and procedures. In Japan, listed companies will be required to comply with similar rules in 2008.
This study examines the applicability of Section 404 of the Sarbanes Oxley Act in Taiwan. A questionnaire was developed to understand the status of current related regulations and the implementations of internal control in Taiwan and the expected benefits of complying with the section 404 of SOX.
Empirical data was collected from auditors in the Big 4 CPA firms, internal auditors in listed (OTC) corporations , and government officers. After analyzing the data, we found that: (1) Knowledge is insufficient on regulations of internal control, financial disclosures and regulations of financial report quality. (2) The documentation of internal control procedures was not amended immediately as the procedure is changed. (3) The self-appraisal of internal controls was often just seen as paperwork. From the collected data (questionnaires), it appears that companies in Taiwan need to improve their internal control compliance.
The expected benefits viewed from auditors attesting to and reporting on the effectiveness of internal control structures and procedures are as follows. Respondents feel that managers will place greater importance on internal controls. Businesses will operate more effectively and enhance corporate governance.
What kind of problems will be faced and what suggestions can be made? The respondents expect that audit fees and auditors’ responsibilities will increase. They also suggest that the regulations should be clear and not too complicated. External auditor’s internal control audit scope and adequacy should focus on financial reporting and refer to SOX.
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