What are the roles of an audit committee?

The composition and roles of an audit committee are described in Section 301 of SOX. According to the SEC decree on April 9, 2003, all US stock exchanges should issue rules before July 23, 2005 so that foreign companies which are listed at US stock exchanges possess an audit committee. According to Section 205 of SOX, the […]

What is the framework of audit in China?

How can I set up an efficient internal control system in order to reach SOX compliance?

The following steps are developed based on the COSO framework. They can help you to analyze the structures of the processes of your control system and help you to implement a new internal control system. 1. Form discussion groups and brainstorm about your business processes, main risks, current reporting structure, your business environment and so […]

What are COSOs five elements of internal control?

COSO’s five elements have been essentially adopted by more and more professionals as the cornerstone of SOX though SOX does not specify which internal control framework to follow. a) the control environment, b) risk assessment, c) control activities, d) information and communication and e) monitoring

When should I have to fully comply with SOX?

If you are a non-US subsidiary of an US public company, you need to follow the rules of SOX 404 for the first time in your annual report of the accounting year which ends after April 15, 2005. If you are listed at an US stock exchange, it should be the first accounting year which ends after June 15, 2004.

What is the framework of audit in China?

How much does normally SOX compliance cost?

This depends on each special case and can not be said in general. But the costs can be significant: US major companies declared they invested four million dollars on average for documentation only. In China, the cost can be relatively low since the labor cost in China is as expensive as that in the US or Europe. Professionals equipped with international best practice […]

Why should I implement SOX?

Firstly, if you are affected by SOX as described above and your reporting doesn’t comply with SOX, you may suffer from criminal punishment. Secondly, integrating an effective internal control system in your financial reporting can help you to reduce risks of asset loss. Thirdly, financial reports with sound internal control system in place can enhance the confidence of investors and […]

What is the framework of audit in China?

My company is not American. Will I be affected by SOX anyway?

If you are a non–US subsidiary and your parent company is enlisted at an US stock exchange you have to comply with SOX 404; if you are a US subsidiary of a non–US company and your parent company is not listed in the US, you don’t have to comply with SOX.

Who is affected by SOX?

The affect of SOX is pervasive. All companies listed at US stock exchange should comply with SOX.Hence, all stakeholders of these companies are significantly affected, including boards, management, auditors, brokers, dealers, investment bankers and financial analysts, etc.

What is the framework of audit in China?

What is SOX 404?

Probably the most important section of the Sarbanes-Oxley Act of 2002 is Section 404. It requires the implementation and documentation of an adequate internal control system in the company. All reporting related internal controls should refer to this section. The management of the company has to value the usefulness of its internal control system and has to publish the results together […]