Please revise any false statement to make it true. 11. 12. l3. I4. 15. 16. I7. 18. I9. 20. 21. 22. 23. 24. 25. 26. The Sarbanes-Oxley Act applies to all corporations. The PCAOB was established by the Securities Act of 1934. Auditors must retain their working papers for a minimum of five years. The auditor must design and create an effective internal control system. Auditor independence is breached by having the audit firm also prepare the tax returns of the publicly traded corporation. An audit partner or a reviewing partner cannot audit the same rm for more than ve consecutive years. A Section 302 certification is led by the publicly traded company's audit firm. The SEC may permanently bar an executive who violates securities law from serving as an ofcer or director of a publicly traded company. With few exceptions, all personal loans to directors and executives of a company are prohibited. A public accounting rm is prohibited from auditing a client if the CEO of the audited company once worked for the auditing rm. All communications between an audit firm and the client must be reported to the audit committee. Senior management must report changes in securities ownership within five days. A Section 404 compliance certication includes an assesuent of a company's inter- nal controls by corporate management. Whistle-blowers are protected from recriminaticns and retaliation only if the alleged charges lead to criminal charges being led against the wrongdoers. Federal sentencing guidelines can be reduced if the organization maintains an ethics and compliance program. Under federal sentencing guidelines, a judge has no discretion to modify the assigned sentence. \f42. Discuss the pros and cons of rotating the audit partners every ve years. What factors 43. are involved in changing audit partners? Does this provision require changing audit rms or solely the personnel involved? Are there any ways to minimize the costs when changing audit partners? Should these rules apply only to companies that have had problems with their past audits? Review the auditing standards that require communi cation between past and current auditors. Do these requirements solve any of the prob- lems you have identied? Discuss the importance of auditor independence. What factors contribute to an auditor being considered independent? How does the merger of the large accounting firms affect the concept of auditor independence? Consider antitrust laws in your answer. Do the large accounting rms have a monopoly on audits of publicly traded companies? Does Sarbanes-Oxley go too far in prohibiting nonaudit services om being provided by the audit rm