Introduction to Internal Financial Controls and the

Sarbanes-Oxley Act
Internal Financial Controls

Internal financial controls are systematic measures and procedures instituted within an
organization to ensure the integrity of financial and accounting information, promote
accountability, and prevent fraud. These controls encompass a range of activities, including:

 Segregation of Duties: Ensuring that no single individual has control over all aspects
of a financial transaction, thereby reducing the risk of errors or fraudulent activities.
 Authorization and Approval Processes: Requiring appropriate managerial approval
for transactions to ensure they are legitimate and within the organization’s policies.
 Reconciliations: Regularly comparing financial records with actual transactions to
identify and rectify discrepancies.
 Physical and IT Controls: Safeguarding assets and financial data through physical
security measures and robust information technology protocols.
 Performance Reviews: Regular assessments of financial performance and internal
control effectiveness to ensure alignment with organizational objectives.

Effective internal financial controls are vital for maintaining the accuracy and reliability of
financial reporting, complying with laws and regulations, and enhancing operational
efficiency.

The Sarbanes-Oxley Act (SOX)

The Sarbanes-Oxley Act, enacted in 2002 in the United States, represents a landmark piece of
legislation aimed at enhancing corporate governance and restoring investor confidence in the
wake of major financial scandals, such as Enron and WorldCom. The primary objectives of
SOX are to:

 Enhance Corporate Responsibility: Imposing stricter responsibilities on senior

executives and boards of directors to ensure accuracy and completeness of financial
disclosures.
 Increase Transparency: Mandating comprehensive and timely disclosure of
financial information to protect investors and the public.
 Prevent Fraud: Implementing stringent controls to detect and prevent fraudulent
activities within corporations.
 Improve Audit Quality: Establishing the Public Company Accounting Oversight
Board (PCAOB) to oversee the audits of public companies, thereby enhancing the
reliability of audit reports.

Key provisions of the Sarbanes-Oxley Act include:

 Section 302: Requires senior corporate officers to certify the accuracy of financial
statements and disclosures.
 Section 404: Mandates that management and external auditors report on the adequacy
of the company’s internal control over financial reporting.
  Section 802: Imposes stringent penalties for altering, destroying, or fabricating
financial records.

The Sarbanes-Oxley Act has had a profound impact on corporate governance, internal control
structures, and the overall financial reporting landscape. Organizations are now more vigilant
in implementing robust internal controls to comply with SOX requirements and safeguard
stakeholder interests.

Company Profile: Cummins India Ltd.

Overview

Cummins India Ltd. is a leading manufacturer of diesel and natural gas engines, generator
sets, and related components and technologies. Established in 1962, Cummins India is a
subsidiary of Cummins Inc., a global power leader headquartered in Columbus, Indiana,
USA. The company operates through its various business units, providing power solutions to
diverse sectors such as automotive, industrial, power generation, and distribution.

Key Information

 Headquarters: Pune, Maharashtra, India

 Founded: 1962
 Parent Company: Cummins Inc.
 Industry: Power generation, automotive, and industrial engines
 Website: Cummins India

Business Segments

1. Engine Business:
o Manufacturing and marketing diesel and natural gas engines ranging from 15
to 4,000 HP.
o Serving various sectors, including construction, mining, marine, railways,
defense, and agriculture.
2. Power Systems Business:
o Offering a comprehensive range of power generation solutions, including
diesel and gas generator sets, transfer switches, and paralleling systems.
o Catering to commercial, industrial, and residential applications.
3. Distribution Business:
o Providing aftermarket support, including maintenance, repair, and overhaul
services for Cummins products.
o Ensuring the availability of genuine parts and offering training and technical
support.

Key Products and Services

 Diesel Engines: High-performance engines designed for durability and efficiency in

various applications.
  Natural Gas Engines: Environmentally friendly engines offering lower emissions
and cost-effective operation.
 Generator Sets: Reliable and efficient power generation solutions for standby, prime,
and continuous power needs.
 Components: Turbochargers, filtration systems, exhaust systems, and fuel systems to
enhance engine performance.
 Aftermarket Services: Comprehensive support including maintenance, repair, parts
supply, and technical training.

Strategic Initiatives

 Innovation and R&D: Investing in research and development to create advanced,

efficient, and environmentally friendly power solutions.
 Sustainability: Committing to reducing environmental impact through cleaner
technologies and sustainable business practices.
 Customer Focus: Enhancing customer satisfaction by delivering high-quality
products and exceptional service.
 Global Integration: Leveraging the global capabilities of Cummins Inc. to bring
advanced technologies and best practices to the Indian market.

Financial Performance

Cummins India Ltd. is listed on the Bombay Stock Exchange (BSE) and the National Stock
Exchange (NSE) of India. The company has consistently demonstrated strong financial
performance, driven by its diversified product portfolio, robust market presence, and
commitment to operational excellence.

Corporate Social Responsibility (CSR)

Cummins India is actively involved in various CSR initiatives, focusing on areas such as
education, environment, and community development. The company aims to make a positive
impact on society by supporting sustainable projects and empowering local communities.

Conclusion

Cummins India Ltd. stands as a leader in the power solutions industry, known for its
innovation, reliability, and commitment to sustainability. With a strong foundation and
continuous focus on growth and customer satisfaction, Cummins India continues to drive
progress and contribute to the development of the industries it serves.

Nature of the Study on Internal Financial Controls and

the Sarbanes-Oxley Act
Exploratory Nature

1. Historical Exploration:
 o Investigate the historical development of internal financial controls to
understand their origins and evolution.
o Examine the events and financial scandals that led to the creation of the
Sarbanes-Oxley Act (SOX), highlighting the legislative process and key
drivers for its enactment.
2. Conceptual Framework:
o Develop a comprehensive understanding of internal financial controls,
including definitions, key components, and underlying principles.
o Provide an in-depth overview of SOX, detailing its primary objectives,
structure, and specific provisions affecting public companies.

Analytical Nature

1. Impact Assessment:
o Analyze the impact of SOX on corporate governance, focusing on enhancing
transparency, accountability, and reliability of financial reporting.
o Evaluate the effectiveness of SOX in strengthening internal financial controls
through empirical data, case studies, and expert analyses.
2. Cost-Benefit Analysis:
o Conduct a detailed cost-benefit analysis to assess the financial and operational
implications of SOX compliance for companies.
o Compare the costs associated with implementing SOX-compliant internal
controls with the benefits derived in terms of fraud prevention, improved
financial integrity, and investor confidence.
3. Comparative Analysis:
o Compare SOX with similar regulatory frameworks in other countries to
understand its global influence and applicability.
o Examine differences and similarities in the implementation and effectiveness
of internal financial controls across various regulatory environments.

Methodological Approach

1. Literature Review:
o Conduct an extensive review of existing literature on internal financial
controls and SOX, including academic papers, industry reports, and regulatory
documents.
o Synthesize insights from prior research to build a solid theoretical foundation
for the study.
2. Empirical Research:
o Utilize quantitative methods to analyze data related to SOX compliance,
internal control effectiveness, and corporate governance outcomes.
o Employ qualitative methods, such as interviews and case studies, to gain in-
depth insights into the practical challenges and successes associated with SOX
implementation.
3. Data Sources:
o Draw on various data sources, including financial statements, audit reports,
regulatory filings, and corporate disclosures, to ensure a robust and
comprehensive analysis.
 o Incorporate feedback and perspectives from industry experts, auditors,
corporate executives, and regulatory authorities to enrich the study's findings.

Interdisciplinary Approach

1. Financial and Accounting Perspectives:

o Integrate financial and accounting theories to analyze the role and impact of
internal financial controls and SOX on financial reporting practices.
o Examine how SOX compliance influences financial performance and risk
management.
2. Legal and Regulatory Perspectives:
o Explore the legal and regulatory dimensions of SOX, including its
enforcement mechanisms, penalties for non-compliance, and the role of
regulatory bodies such as the PCAOB.
o Assess the legal implications of SOX for corporate governance and executive
accountability.
3. Managerial and Organizational Perspectives:
o Investigate how SOX has reshaped managerial practices, organizational
structures, and corporate culture.
o Analyze the role of leadership in driving SOX compliance and fostering a
culture of ethical behavior and transparency.

Conclusion

The nature of the study on internal financial controls and the Sarbanes-Oxley Act is
inherently multifaceted, combining exploratory and analytical approaches to provide a
comprehensive understanding of the subject. By employing a mixed-method and
interdisciplinary approach, the study aims to offer nuanced insights into the significance,
impact, and future of internal financial controls and SOX in the realm of corporate
governance and financial reporting. This comprehensive approach ensures that the findings
are robust, reliable, and well-grounded in empirical evidence, contributing valuable
knowledge to the fields of finance, accounting, corporate governance, and regulatory
compliance.

Techniques of Data Analysis

Quantitative Analysis

1. Descriptive Statistics:
o Purpose: To summarize the basic features of the data and provide simple
summaries about the sample and the measures.
o Methods: Mean, median, mode, standard deviation, and variance calculations
to describe the central tendency and dispersion of the data.
o Application: Summarizing financial performance indicators, compliance
rates, and other numerical data related to SOX and internal financial controls.
2. Inferential Statistics:
o Purpose: To make inferences and predictions about a population based on a
sample of data.
o Methods: T-tests, chi-square tests, ANOVA, regression analysis.
 o Application: Testing hypotheses about the impact of SOX on financial
performance, internal control effectiveness, and incidence of financial fraud.
3. Trend Analysis:
o Purpose: To identify patterns or trends in the data over time.
o Methods: Time series analysis, moving averages.
o Application: Analyzing changes in compliance levels, financial reporting
quality, and internal control effectiveness before and after the implementation
of SOX.
4. Comparative Analysis:
o Purpose: To compare different groups or time periods to identify significant
differences or changes.
o Methods: Cross-sectional analysis, longitudinal analysis.
o Application: Comparing financial metrics and internal control effectiveness
across different companies, industries, or time periods.

Qualitative Analysis

1. Content Analysis:
o Purpose: To systematically analyze the content of qualitative data to identify
patterns, themes, or trends.
o Methods: Coding and categorizing text data, thematic analysis.
o Application: Analyzing annual reports, audit reports, regulatory filings, and
interview transcripts to identify key themes related to SOX compliance and
internal financial controls.
2. Case Study Analysis:
o Purpose: To conduct an in-depth analysis of specific cases to gain detailed
insights into the subject matter.
o Methods: Detailed examination of individual cases, cross-case comparison.
o Application: Investigating specific instances of SOX compliance, internal
control failures, or successful implementation of control measures.
3. Interview Analysis:
o Purpose: To gather in-depth information and perspectives from key
stakeholders.
o Methods: Semi-structured interviews, coding and thematic analysis of
interview transcripts.
o Application: Gathering insights from corporate executives, auditors, and
regulatory officials on the practical challenges and benefits of SOX
compliance and internal financial controls.

Mixed Methods Analysis

1. Triangulation:
o Purpose: To enhance the validity and reliability of the research findings by
combining multiple data sources and methods.
o Methods: Integrating quantitative and qualitative data, cross-verification of
findings.
o Application: Combining statistical analysis of financial data with qualitative
insights from interviews and case studies to provide a comprehensive
understanding of the impact of SOX and internal financial controls.
 2. Data Integration:
o Purpose: To merge quantitative and qualitative data to create a more complete
picture.
o Methods: Convergent parallel design, explanatory sequential design.
o Application: Using qualitative data to explain and contextualize quantitative
findings, or vice versa, to enhance the overall analysis and interpretation.

Data Sources and Tools

1. Financial Statements and Reports:

o Sources: Annual reports, quarterly financial statements, audit reports, and
regulatory filings.
o Application: Providing quantitative data for statistical analysis.
2. Surveys and Questionnaires:
o Sources: Structured surveys and questionnaires distributed to corporate
executives, auditors, and regulatory officials.
o Application: Collecting quantitative and qualitative data on SOX compliance
and internal control practices.
3. Interviews:
o Sources: Semi-structured interviews with key stakeholders such as corporate
executives, auditors, and regulatory authorities.
o Application: Gathering qualitative insights and detailed information on the
implementation and impact of SOX.
4. Document Analysis:
o Sources: Analysis of regulatory documents, industry reports, academic
papers, and other relevant literature.
o Application: Providing contextual information and supporting evidence for
the research.

Conclusion

The data analysis techniques for the research paper on internal financial controls and the
Sarbanes-Oxley Act encompass a range of quantitative and qualitative methods. By
employing a mixed-methods approach, the study aims to provide a comprehensive and
nuanced analysis of the subject matter, ensuring that the findings are robust, reliable, and
well-grounded in empirical evidence.

Scope of Study on Internal Financial Controls and the

Sarbanes-Oxley Act
1. Historical and Legislative Context

 Evolution of Internal Financial Controls:

o Explore the development of internal financial controls from their inception to
the present day.
o Investigate the historical events and financial scandals, such as Enron and
WorldCom, that precipitated the need for stricter regulations and led to the
enactment of the Sarbanes-Oxley Act (SOX) in 2002.
  Legislative Framework:
o Analyze the legislative process that led to the creation of SOX, including the
roles of key policymakers and stakeholders.
o Detail the specific sections of SOX and their legislative intent.

2. Key Provisions and Requirements of SOX

 Major Sections of SOX:

o Provide an in-depth analysis of critical sections such as Section 302
(Corporate Responsibility for Financial Reports), Section 404 (Management
Assessment of Internal Controls), and Section 802 (Criminal Penalties for
Altering Documents).
 Compliance Requirements:
o Detail the specific compliance requirements for public companies under SOX,
including documentation, reporting, and audit requirements.
o Examine the roles and responsibilities of management and auditors in ensuring
compliance.

3. Impact on Corporate Governance

 Board and Executive Responsibilities:

o Investigate how SOX has redefined the roles and responsibilities of corporate
boards and executives, particularly in terms of accountability and
transparency.
 Audit Committees:
o Analyze the enhanced role and responsibilities of audit committees in
overseeing financial reporting and internal controls as mandated by SOX.

4. Effectiveness of Internal Financial Controls

 Implementation of Controls:
o Assess how companies have implemented internal financial controls to
comply with SOX requirements.
o Evaluate the effectiveness of these controls in preventing fraud, ensuring
accurate financial reporting, and promoting transparency.
 Challenges and Best Practices:
o Identify common challenges companies face in implementing SOX-compliant
internal controls and highlight best practices for overcoming these challenges.

5. Financial and Operational Implications

 Cost of Compliance:
o Analyze the financial and operational costs incurred by companies to comply
with SOX requirements, including costs related to documentation, audits, and
process changes.
 Benefits of Compliance:
o Evaluate the benefits of SOX compliance, such as improved financial
integrity, enhanced investor confidence, and reduced risk of financial fraud.
6. Comparative Analysis

 Global Perspective:
o Compare SOX with similar regulatory frameworks in other countries to
understand its global influence and applicability.
o Examine how different countries have adopted or adapted elements of SOX in
their own regulatory environments.
 Industry-Specific Analysis:
o Investigate how different industries have adapted to SOX requirements and the
varying impacts of SOX compliance across sectors.

7. Case Studies and Empirical Data

 Case Studies:
o Conduct detailed case studies of specific companies to illustrate successful
implementation of SOX-compliant internal controls as well as cases of
compliance failures.
o Highlight lessons learned from these case studies.
 Empirical Analysis:
o Utilize empirical data to support findings related to the effectiveness and
impact of SOX and internal financial controls.
o Analyze trends and patterns in compliance rates, financial performance, and
incidence of financial fraud.

8. Future Directions and Recommendations

 Emerging Trends:
o Predict future trends in corporate governance, financial reporting, and
regulatory compliance, considering technological advancements and evolving
business environments.
 Policy Recommendations:
o Provide recommendations for policymakers to enhance the effectiveness of
SOX and internal financial control frameworks.
o Suggest potential reforms and improvements to address identified limitations
and challenges.

9. Interdisciplinary Perspectives

 Financial and Accounting:

o Integrate financial and accounting theories to analyze the impact of SOX on
financial reporting practices and internal controls.
 Legal and Regulatory:
o Explore the legal and regulatory dimensions of SOX, including enforcement
mechanisms, penalties for non-compliance, and the role of regulatory bodies
such as the PCAOB.
 Managerial and Organizational:
o Investigate how SOX has reshaped managerial practices, organizational
structures, and corporate culture.
 o Analyze the role of leadership in driving SOX compliance and fostering a
culture of ethical behavior and transparency.

Conclusion

The scope of this study on internal financial controls and the Sarbanes-Oxley Act is broad
and comprehensive, encompassing historical, legislative, and practical dimensions. It aims to
provide a detailed understanding of SOX and its impact on corporate governance, financial
reporting, and regulatory compliance. By integrating multiple perspectives and employing
diverse research methodologies, the study seeks to offer valuable insights and contribute to
the fields of corporate governance, financial regulation, and organizational management.

Significance of the Study on Internal Financial Controls

and the Sarbanes-Oxley Act
Enhancing Corporate Governance

1. Strengthening Accountability and Transparency:

o The study underscores the critical role of internal financial controls and SOX
in enhancing corporate governance by promoting accountability and
transparency in financial reporting.
o By examining the provisions of SOX, the study highlights how the Act has
redefined the responsibilities of corporate executives and boards, ensuring
they are held accountable for the accuracy and completeness of financial
statements.
2. Improving Board and Audit Committee Effectiveness:
o The research provides insights into how SOX has elevated the roles and
responsibilities of audit committees, thereby strengthening their oversight
functions.
o This emphasis on robust internal controls aids in improving the overall
effectiveness of corporate boards and audit committees.

Advancing Financial Reporting Integrity

1. Enhancing Financial Accuracy and Reliability:

o The study demonstrates how SOX has contributed to the improvement of
financial reporting accuracy and reliability, reducing the likelihood of
financial misstatements and fraud.
o It evaluates the effectiveness of internal financial controls in ensuring the
integrity of financial statements, thus fostering investor confidence.
2. Promoting Ethical Financial Practices:
o By analyzing the impact of SOX, the study emphasizes the importance of
ethical financial practices and the role of internal controls in promoting a
culture of integrity within organizations.
o It provides a framework for companies to develop and maintain ethical
financial reporting practices.

Informing Policy and Regulatory Development

 1. Guiding Policymakers:
o The study offers valuable insights and recommendations for policymakers
aiming to enhance the effectiveness of financial regulations.
o By identifying the strengths and weaknesses of SOX, the research suggests
potential areas for reform and improvement, contributing to the ongoing
evolution of regulatory frameworks.
2. Comparative Analysis for Global Application:
o By comparing SOX with similar regulatory frameworks globally, the study
provides a basis for understanding its influence and applicability in different
regulatory environments.
o This comparative analysis can help other countries develop or refine their own
financial regulatory frameworks.

Supporting Corporate Compliance Efforts

1. Providing Best Practices:

o The study identifies best practices for implementing and maintaining SOX-
compliant internal financial controls, offering practical guidance for
companies.
o These best practices can help organizations navigate the complexities of SOX
compliance, ensuring they meet regulatory requirements efficiently.
2. Enhancing Organizational Efficiency:
o By understanding the financial and operational implications of SOX
compliance, companies can better allocate resources and streamline their
internal control processes.
o The study aids in identifying strategies to balance compliance costs with the
benefits of improved financial integrity and reduced risk.

Contributing to Academic and Professional Knowledge

1. Advancing Research in Corporate Governance:

o The study adds to the body of academic literature on internal financial
controls, SOX, and corporate governance, providing a foundation for future
research in these areas.
o It integrates multiple disciplinary perspectives, enriching the academic
discourse and offering comprehensive insights.
2. Professional Development and Education:
o The study serves as a valuable resource for professionals in finance,
accounting, auditing, and corporate governance, helping them stay informed
about regulatory developments and best practices.
o It supports the professional development of individuals by providing in-depth
knowledge and practical insights into SOX and internal financial controls.

Addressing Practical Challenges

1. Identifying and Overcoming Implementation Challenges:

o The study identifies common challenges companies face in implementing
SOX-compliant internal controls and offers strategies to overcome these
challenges.
 oThis practical focus helps organizations improve their internal control systems
and achieve compliance more effectively.
2. Balancing Costs and Benefits:
o By conducting a cost-benefit analysis of SOX compliance, the study helps
companies understand the financial implications and make informed decisions
about resource allocation.
o It highlights the long-term benefits of robust internal controls, such as
enhanced investor confidence and reduced risk of financial fraud.

Conclusion

The significance of the study on internal financial controls and the Sarbanes-Oxley Act lies in
its comprehensive examination and multifaceted approach. By enhancing corporate
governance, advancing financial reporting integrity, informing policy development,
supporting corporate compliance efforts, contributing to academic and professional
knowledge, and addressing practical challenges, the study provides valuable insights into the
importance and impact of SOX and internal financial controls. These insights are crucial for
regulators, policymakers, corporate executives, auditors, and academics seeking to
understand and improve the landscape of corporate governance and financial reporting.

Limitations of the Study on Internal Financial Controls

and the Sarbanes-Oxley Act
1. Scope and Generalizability

1. Sample Size and Representation:

o The study may be limited by the sample size and the representativeness of the
data. If the sample is not sufficiently large or diverse, the findings may not be
generalizable to all public companies or industries.
2. Geographical Focus:
o While the study aims to include a global perspective, it may be primarily
focused on the U.S. context, where SOX is directly applicable. This may limit
the applicability of the findings to other regulatory environments with
different financial control frameworks.

2. Data Limitations

1. Availability and Quality of Data:

o The quality and availability of data on internal financial controls and SOX
compliance can vary significantly across companies. Inconsistent or
incomplete data can affect the accuracy and reliability of the study's findings.
2. Historical Data:
o Historical financial data and internal control assessments may not be readily
available or may be outdated, limiting the ability to conduct a comprehensive
longitudinal analysis.

3. Methodological Constraints
 1. Reliance on Self-Reported Data:
o The study may rely on self-reported data from companies, which can be
subject to bias or inaccuracies. Companies may present an overly positive
view of their compliance and internal control effectiveness.
2. Quantitative vs. Qualitative Balance:
o Striking the right balance between quantitative and qualitative data can be
challenging. While quantitative data provides measurable insights, qualitative
data offers depth and context that may be difficult to quantify.

4. Regulatory and Legal Complexity

1. Complexity of SOX Provisions:

o The complexity and breadth of SOX provisions may make it difficult to
comprehensively cover all aspects of the Act within the scope of a single
study. Some nuances and specific details may be overlooked.
2. Evolving Regulatory Landscape:
o The regulatory landscape is constantly evolving, with new amendments and
interpretations of SOX emerging over time. The study may not fully capture
the most recent developments and their implications.

5. Subjectivity in Case Studies and Interviews

1. Selection Bias:
o The selection of case studies and interview subjects may introduce bias, as
companies or individuals willing to participate may have different
characteristics than those who do not.
2. Interpretation of Qualitative Data:
o Analyzing and interpreting qualitative data from interviews and case studies
involves a degree of subjectivity, which can influence the study's conclusions.

6. Financial and Operational Implications

1. Cost-Benefit Analysis Limitations:

o Conducting a comprehensive cost-benefit analysis of SOX compliance
involves numerous variables and assumptions. Accurately quantifying costs
and benefits can be challenging, and the results may vary based on the chosen
methodology.

7. Potential Confounding Factors

1. External Influences:
o External factors such as economic conditions, industry-specific trends, and
technological advancements can influence the effectiveness of internal
financial controls and the impact of SOX. These factors may confound the
study's findings.
2. Causal Relationships:
o Establishing causal relationships between SOX compliance and improvements
in financial reporting or corporate governance can be complex. Correlation
 does not necessarily imply causation, and other variables may contribute to
observed outcomes.

8. Time Constraints

1. Longitudinal Analysis:
o Conducting a longitudinal analysis to assess the long-term impact of SOX and
internal financial controls requires extensive time and resources. Shorter study
durations may not capture long-term trends and effects.

Conclusion

While the study on internal financial controls and the Sarbanes-Oxley Act aims to provide
comprehensive and valuable insights, it is important to acknowledge these limitations.
Understanding these constraints helps to contextualize the findings and identify areas for
further research and exploration. Despite these limitations, the study contributes to the
ongoing discourse on corporate governance, financial reporting, and regulatory compliance,
offering a foundation for future investigations and policy developments.
Internal control under Sarbanes‐Oxley: a
critical examination :- By
James A. Tackett, F. Wolf, G. A. Claypool

Purpose - Since the Sarbanes-Oxley Act (SOX) was passed, the financial reporting standards
for publicly traded corporations have changed significantly. Reports on the operational
efficacy of internal controls over financial reporting are now mandatory for companies. The
independent auditor must also certify to management's internal control evaluation and
evaluate and report on the efficacy of their client's internal controls. This essay's goal is to
analyse the advantages and disadvantages of SOX 2002's Section 404.Design, procedure, and
strategy The net benefits of Section 404 to the securities markets are assessed through the
application of qualitative analysis and logical reasoning.Conclusions: The qualitative study
indicates that the securities markets will not benefit net from the new internal control
reporting requirements.