Metaluna,Inc

question 77

Essay

Metaluna,Inc.,is a new software company that recently began operations in 2003.Metaluna's stock is publicly traded.Listed below are several statements made recently by the CEO and Chairman of the Board of Metaluna at a directors meeting.
Required: Please comment on each statement in light of the requirements imposed by the Sarbanes-Oxley Act (SOA)of 2002.
a."I would like our external auditors to have a major role in our financial systems design and implementation in the future.They seem like a good group of knowledgeable individuals who I believe can help us in this area."
b."As you know,our controller resigned from her position this week.I would like to see if someone from the auditing firm who worked on our most recent audit would be interested in coming 'on board' with us."
c."I am ready to approve a $20,000 company loan to our CIO to help him send his daughter to Stanford in the fall."
d."The audit committee has suggested that a new auditing firm be hired after completion of our current audit.I would like the board to make a resolution giving me sole discretion and authorization in this matter,since I believe I am better qualified to make such a decision."

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Definitions:

Monetary Policy

The process by which a central bank controls the money supply, aiming at specific economic targets such as controlling inflation, stimulating economic growth, and reducing unemployment.

Classical Economics

A school of thought in economics that emphasizes the idea that free markets can regulate themselves through the laws of supply and demand.

Government Intervention

Actions taken by government to influence or regulate economic activity, often to achieve economic or social objectives.

Budget Deficits

The situation where a government's expenditures surpass its revenues within a specified period, leading to a shortfall that requires borrowing.