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Respond to…

The Sarbanes-Oxley Act of 2002 was created to protect investors from fraudulent activities by corporations, The rules was created to provide improved financial disclosure from corporations. The Act was enacted mainly in response to the scandals that happen in 2000 and included Enron, Tyco, and WorldCom.

I chose to utilize Costco’s annual financial report. The information from SAM’s company annual financial report. The company considers all cash on deposit, liquid investment with a maturity of three months or less, debit and credit transaction up to one week. THE credit and debit card receivables 1542 at the end of 2018 and 1698 at the end of 2016.

Internal control policies for Costco, the management is held responsible for establishing a maintaining control over financial reporting as defined under Exchange Act (Brotman & Jelinek 2016). . Their internal control over financial reporting reasonable assurance in regard to reporting of financial statements for purposes of external usage, According to U.S. Gap financial reporting includes the policies and procedures pertaining to maintenance of records reflecting our transaction and dispositions; reasonable assurance that transaction are recorded as necessary permit preparation and provide reasonable assurance preventing timely detection of unauthorized acquisition that could affect our financial statements (Brotman & Jelinek 2016). . Internal control over financial reporting may not prevent or detect misstatements due to inherent limitations. The effective system can provide reasonable amount of assurance.

Sox annual report is in compliance. “The have adopted a code of ethics for senior financial officers to Section 406 of Sarbanes-Oxley Act” (Brotman & Jelinek 2016).

Respond to…

The annual financial report for a public U.S. company that I viewed was for Amazon. After viewing the notes section to Amazon’s financial statements, I determined that the criteria for cash equivalent and how cash and cash equivalents are handled by the company is by recording at fair value. Amazon measures at fair value on a recurring basis and categorizes using the fair value hierarchy (in millions). Fair value pertains to the practice of measuring assets and liabilities at estimates of their current value.

The information pertaining to the internal control policy of Amazon aligns with the Sarbanes-Oxley Act. Amazon states under their controls and procedure section that they utilized a proper disclosure committee just as is required by the SEC which included their principal executive officer and principal financial officer. They also stated that they processed, summarized, and reported within the time periods specified in the SEC, just as what is required in section  401 of SOX.  Amazon also reported in their financial statement that, “our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles” (Item 9.A). This aligns with section 404 of SOX, where the registered accounting firm, which in the case of Amazon was listed as Ernst & Young, should access and report on the effectiveness of internal control structure and procedures of a company. 


AMAZON.COM, INC. FORM 10-K For the Fiscal Year Ended December 31, 2018 Retrieved from https://www.sec.gov/Archives/edgar/data/1018724/000101872419000004/amzn-20181231x10k.htm#sB35C52572A45505E9A3247019C860F91 (Links to an external site.)

The Sarbanes-Oxley Act 2002 Retrieved fromhttp://www.soxlaw.com/index.htm


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