Fraudulent and other inappropriate activities led to failures at major public companies such as Worldcom, Enron, Sunbeam, Waste-Management, and others as well as the failure of Arthur Anderson which was one of the Big Five CPA firms in the U.S. Arthur Anderson was the public, independent auditor tasked with reporting on the accuracy of the annual financial reports (10-K) of major public companies.

In light of fraudulent activities similar to these, the SOX included Title 11- Auditors Independence which lists eight prohibited activities that may impair or compromise the independence between the auditor and companies (clients) they are hired to audit.

Discussion

For your main discussion topic, choose one of the eight prohibited non-audit services found in the SOX and:

• Describe the prohibited activity in your own words and how it could impair the judgment and accuracy of the auditors report of the clients financial activities, provide examples, and cite the source of your information.