Problem
One reason that the Insignia fraud was able to happen was due to a nearly non- existent internal controls. The Sarbanes Oxley Act was passed in 2003, and companies were required to be in compliance for FY 2005 which is when the Insignia fraud came to an end. What Constitutes an Effective System of Internal Control as it Relates to the Requirements of Section 404? Who is responsible for establishing internal controls?