It also requires the company's independent auditor to attest to management's disclosures regarding the effectiveness of internal control.
The act also created the Public Company Accounting Oversight Board (PCAOB).
SAS 109 stipulates that "auditors should obtain an understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.
The aforementioned five components of internal control refer to the five parts of the COSO framework.
Material misstatements are expensive to fix, and receiving an adverse or qualified opinion generally results in a drop in stock price of a publicly traded company.