Under The Sarbanes-Oxley Act of 2002 (SOX), all publicly traded U.S. corporations are required to maintain an adequate system of internal control, corporate executives and boards of directors must ensure that these controls are reliable and effective, and independent outside auditors must attest to the adequacy of the internal control system.
What is internal control? What are the five primary components of an internal control system? In your own words, briefly describe these five components of internal control.
What is the basic purpose of External Auditors? What type of reports can they issue? What is the effect of each of the reports?