Reference no: EM13348584

Question:

In a 6 page APA formatted paper, analyze the intent of the Sarbanes-Oxley Act of 2002 (SOX). What is the major drawback of the SOX Act? Explain its provisions. What are the differences between a section 302 certification and a section 404 compliance certification?

Question:

For each of the subsequent potential unrecorded liabilities, evaluate the effects of the omission on both the balance sheet and income statement of the client. Suppose that the inventories recorded on the balance sheet reflect the results of a year-end (31^st December) physical inventory.

a. An invoice for $3,000 worth of inventory items, dated 1^st January and bearing terms FOB destination, was not recorded. The goods were shipped December 27 and were received on December 30.

(1) Balance sheet effect:

(2) Income statement effect:

b. An invoice the $5,500 worth of inventory items, dated 30^th December and bearing terms FOB destination, was not recorded. The goods were shipped 28^th December and received January 2.

(1) Balance sheet effect:

(2) Income statement effect:

c. An invoice for $8,000 for a delivery truck, dated 2^nd January and bearing terms FOB shipping point, was not recorded. The truck was shipped 30^th December and received on January 3.

(1) Income statement effect:

(2) Balance sheet effect:

d. An invoice for $1,000 for legal fees rendered in December was not recorded.

(1) Income statement effect:

(2) Balance sheet effect: