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CEO Billy Jean has heard that due to the Sarbanes-Oxley Act, costs have increased significantly when operating a public company. Jean is especially apprehensive with reports that he can anticipate double the audit fees due to the internal control provisions of the Act and PCAOB Auditing Standard No. 2201. Jean has asked you to explain how the Sarbanes-Oxley requirements may affect the audit.
Required:
Organize and share your thoughts if the company decides to go public. How would complying with the Sarbanes-Oxley and PCAOB Auditing Standard No. 2201 change the company's responsibilities for internal control? Then use your thoughts to:
Question 1: Describes the changes in internal controls (due to PCAOB and Sarbanes-Oxley standards) needed once they become a public company.
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