The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to: The following item is NEW to the 13th edition. A. rising complaints by investors and security analysts over the financial accounting for stock options. B. a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others. C. a dramatic rise in the US trade deficit. D. charges of excessive compensation to top corporate executives
Question
The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to: The following item is NEW to the 13th edition. A. rising complaints by investors and security analysts over the financial accounting for stock options. B. a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others. C. a dramatic rise in the US trade deficit. D. charges of excessive compensation to top corporate executives
Solution
The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to: B. a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others.
This act was passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The SOX Act mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud. This was largely in response to the corporate scandals of the early 2000s where companies like Enron, WorldCom and Tyco were found guilty of fraudulent accounting practices.
Similar Questions
The Sarbanes–Oxley Act of 2002 intended to reform:Multiple choice question.supply chain operations.persecution of convicted robbers.public company accounting.lawyer interaction with company officials.
Which of the following led to the passage of the Sarbanes-Oxley Act of 2002?Multiple choice question.High profile accounting scandals during the early 2000sThe likely adoption of global accounting standards in the U.S.The increasing complexity of U.S. GAAPThe increasing incidence of financial statement misstatements
Which of the following is one of the challenges of the Sarbanes-Oxley (SOX) Act?It is very expensive and nearly impossible to test all of a company's controls.It is difficult to require top executives to sign off on a quarterly basis that security controls meet SOX 404 requirements.The government changes the rules for SOX almost every year.It is difficult to write security policies that highlight key controls.
Why was the Sarbanes–Oxley Act of 2002 amended in 2010?Multiple choice question.To enhance the power of the board supervising the act to establish clearer disciplinary proceedings where violations have occurredTo minimize control over the financial activities of public companiesTo mandate employers to provide health insurance to employees who work for more than 30 hours per weekTo create a five-member commission that has the power to prescribe safety standards for more than 15,000 types of consumer products
The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of financial accountants and auditors of affected entities. Select TRUE or FALSE:
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