2) For the past seven years, Deborah McGrane has been a CPA in the audit departm
ID: 328138 • Letter: 2
Question
2) For the past seven years, Deborah McGrane has been a CPA in the audit department of KPMG, a "Big Four" CPA firm. She has participated in the audits of several of KPMG's largest clients, including General Electric, Arista Records, Sony, Inc., and Verizon, among others. Deborah has developed a sterling, unassailable professional reputation. Her clients speak very highly of her and her bosses' performance evaluations give her rave reviews. Thus, it comes as no surprise that in March 2017, Sony wants Deborah to join the company as its chief financial officer at a starting salary of $4,000,000 per year, plus bonuses and stock options. Deborah last audited Sony in December 2015. Deborah wants to take the job, but she is concerned about Section 206 of Sarbanes-Oxley, which places limitations on auditors taking jobs with current or former clients. Deborah comes to you, a specialist in law and accounting, for advice. Carn Deborah accept Sony's job offer? Be sure to explain the reasons for your answerExplanation / Answer
In my opinion, Deborah is free to join Sony as CFO as the section 206 of Sarbanes Oxley act puts the restriction of performing any kind of auditing by the free and independent third-party audit firm if any member of audit firm has audited the other organization within last year and presently that employee is working as CEO, CFO or other high-ranking executives.
The section 206 is as below:-
It can be considered as a unlawful activity by any registered public accounting firm to conduct for an issues any sort of auditing required by this tile if CEO, Controller, CFO, CAO or any other individual serving in equivalent job for the issues was working in that registered independent public accounting firm and has been involved in any position in the audit of that issues during the 1-year and preceding the date of the initiation of the audit.
As Deborah audited Sony in December 2015 and she was offered the job as CFO in March 2017 so the restriction of 1 year will be overruled and thus she can join Sony.
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