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Holcomb Inc. was a privately owned company until last year, when it went public. Holcomb

wants to ensure that it is following all the rules and regulations of Sarbanes$-$Oxley. Until this

year, Holcomb really did not give any thought to the SOX law.

Listed below are some company policies and procedures that are in place. The CEO will

investigate whether these existing policies comply with SOX.

Review the list and determine whether or not the policy is Sarbanes$-$Oxley compliant.The CEO established an audit committee three years ago. The audit committee

consists of the CEO's brother $($a middle$-$school accounting teacher$),$ his daughter $($a

college freshman majoring in finance$),$ his neighbor $($a retired school bus driver$),$

and his accounting professor from college who is now a CPA and partner in a

national accounting firm. All of the audit committee members are members of the

board of directors. The CEO pays a small salary to the neighbor and the daughter

to compensate them for their time. The brother is a $30$ percent owner in the stock of

Holcomb.

Four years ago, the CEO hired a top$-10$ national accounting firm to do the audits.

The CEO plans to continue to oversee the audit firm's work now that Holcomb Inc.

is publicly held. The CEO meets quarterly with the audit senior manager to keep the

auditor apprised of what is going on in the company. So far, the CEO is happy with

the work of the audit firm and the senior audit manager, so plans to maintain that

following: Internal controls have been evaluated for effectiveness as of a date within

six months prior to the report.

Another statement related to the annual report that must be signed by the CEO and

CFO is the following:

$5$ Disclosures have been made to the auditors and the audit committee of any

material fraud that involves management or any other employee with a significant

role in internal controls.

The annual report will contain a statement that rhanagement of the internal audit

function is responsible for establishing and maintaining an adequate internal control

structure and procedures for financial reporting.

Holcomb has always had a code of conduct for employees at all levels of the

nroanization In the annulal rennit the sianifirant arrountinn noliries sention of the

following: Internal controls have been evaluated for effectiveness as of a date within

six months prior to the report.

Another statement related to the annual report that must be signed by the CEO and

CFO is the following:

$5$ Disclosures have been made to the auditors and the audit committee of any

material fraud that involves management or any other employee with a significant

role in internal controls.

The annual report will contain a statement that rhanagement of the internal audit

function is responsible for establishing and maintaining an adequate internal control

structure and procedures for financial reporting.

Holcomb has always had a code of conduct for employees at all levels of the

nroanization In the annulul rennit the sianifirant arrountinn noliries sertion of the