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rd to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty (www.crfonline.org, 2010).

A qualified opinion is an audit report where the auditors do not agree with the fair presentation of the financial statements in accordance with GAAP. It decreases the auditors’ exposure for fair presentation in areas of the statements. A separate paragraph usually discloses the reason of the qualification. An adverse opinion states that the financial statements are not presented fairly and do not represent the position of the company in accordance with GAAP. A disclosure paragraph explaining the reason of the adverse opinion should be included. A disclaimer of opinion is issued when auditors do not express an opinion. A disclaimer of opinion is issued when significant conditions prevent compliance with the generally accepted accounting principles.

The issue of independence of auditors and the ability to effectively discover financial statement frauds has been raised with the accounting scandals of the past years. The failure big corporations such as of Enron, Adelphia Communications, and the Arthur Andersen audit firm in the early 2000 have triggered a lot of changes in the Auditing profession. The Sarbanes-Oxley Act of 2002, the SAS 99, the emphasis on ethics and professional skepticism are few of the changes that followed the failure of these giant corporations. Arthur Andersen, a major auditing firm in the early 2000 was convicted of obstruction of justice by shredding documents related to the audit of Enron (www.forbes.com, 2002). The failure of Enron was one of the biggest corporate scandals in the history of the United States. It was a negative period for the auditing profession. Investors and the public have lost trust in auditing firms and their ability to effectively uncover frauds related to financial statements was constantly raised. The statement on auditing standards 99 was issued and took effect on December 15, 2002 discussing the consideration of fraud in a financial statement audit (www.aicpa.org,). The statement on auditing standard 99 stressed the importance for auditors to exercise professional skepticism when considering the existence of material misstatement due to fraud. SAS 99 provided new guidance for the overall audit process. The accounting scandals have stressed the importance of teaching and training accountants on ethics and the exercise of professional skepticism. The Sarbanes-Oxley Act, with Senator Paul Sarbanes and Representative Michael Oxley as the masterminds (www.soxlaw.com, 2010) was the major change that affected the auditing profession following the many accounting scandals in the beginning of the current decade.

In the wake of many corporate financial statements scandals, the Sarbanes-Oxley Act (SOX) was passed to protect the interest of investors by ensuring that corporate disclosures are accurate and conform to securities laws. The Sarbanes-Oxley Act introduced new standards for corporate governance as well as penalties for not doing the proper thing. New internal controls and measures to validate financials records were included in the Act. SOX requires the existence of adequate controls to guarantee the legitimacy of financial records. The Sarbanes-Oxl本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。