Impact of the Sarbanes-Oxley Act on Accounting

Although auditing is the most effective tactic to get a true and fair view of the state of affairs of a company, certain audit issues such asset valuation, asset ownership, and manager representation challenge the scope of auditing. Asset valuation greatly affects the efficacy of auditing as asset statement constitutes a major part of financial reports. Auditors confront with this issue when company or person fails to present enough evidence to support specific claims. Sometimes, auditors may not deeply examine information that a filer has included. Under such a situation, the auditor is at fault. However, people normally neglect to provide supporting evidence that justifies the claims. In this situation, an official auditor will either visit the person at fault or the person will be