The preparation of financial information is an essential role of management of all public companies. For example, access to accurate and timely information improves the ability to effectively manage business operations. Additionally, it encourages investors to trust the company's financial reports if the company needs to increase its capital in the government securities market. Management's ability to fulfill its financial reporting functions depends on the design and effectiveness of the process as well as the security implemented on financial and accounting reports. Without these controls, it will be difficult for companies to prepare reliable and timely financial reports for lenders, investors, management and other users. Although there is no guarantee that financial reports will not contain errors, effective internal control systems over financial reporting are able to significantly minimize such inaccuracies or errors in the company's financial statements. . Over time, effective internal control over financial reporting has become one of the most important legal obligations. For example, federal law requires a public corporation to create a system of internal controls that provides reasonable assurance regarding the reliability of financial reporting in accordance with generally accepted accounting principles (GAAP). Additionally, the Sarbanes-Oxley Act requires management of public companies to evaluate the effectiveness of internal control over financial reporting (ICFR) and report the results to the public on an annual basis. Additionally, the law requires large public companies to hire independent auditors to verify the effectiveness of their ICFR (Vay, 2006). Management plays an important role in ensuring...... middle of paper ...... their advisors, if they deem it necessary. I believe these requirements are sufficient to protect shareholders and potential investors from accounting errors and fraudulent business practices (Johnstone & Gramling, 2014). Works Cited Frederikslust, R. (2007). Corporate Governance and Corporate Finance: A European Perspective. Routledge. Johnstone, K.M. and Gramling, A.A. (2014). Audit: A Risk-Based Approach to Conducting a Quality Audit (9th ed.). Mason, OH: South-Western Cengage Learning. Nelken, I. (2006). Management of investments in hedge funds. Amsterdam: Elsevier/Butterworth-Heinemann. Rezaee, Z. (2009). Corporate governance and ethics. Hoboken, NJ: John Wiley & Sons. Vay, D.L. (2006). The effectiveness of the Sarbanes-Oxley Act of 2002 in preventing and detecting financial statement fraud: A dissertation. Boca Raton, Florida: Dissertation.com.