Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Sarbanes-Oxley Act

Financial Accounting

6. Internal Controls and Reporting Cash

Sarbanes-Oxley Act

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Multiple Choice

Which of the following has been noted as an unintended consequence of the Sarbanes-Oxley Act?

Increased compliance costs for smaller public companies

Decreased demand for external auditors

Reduction in the accuracy of financial statements

Elimination of internal control requirements

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Verified step by step guidance

Understand the Sarbanes-Oxley Act (SOX): The Sarbanes-Oxley Act was enacted in 2002 to improve corporate governance and accountability, primarily in response to major corporate scandals. It introduced stricter regulations for financial reporting and internal controls.

Analyze the options provided: Review each option to determine which aligns with the unintended consequences of SOX. Consider the impact of SOX on companies, particularly smaller public companies, and the auditing profession.

Evaluate 'Increased compliance costs for smaller public companies': SOX compliance requires significant resources, including hiring experts and implementing robust internal controls. Smaller companies often face higher relative costs due to limited resources, making this a plausible unintended consequence.

Assess 'Decreased demand for external auditors': SOX increased the need for external auditors to ensure compliance with its provisions, so this option is unlikely to be correct.

Consider 'Reduction in the accuracy of financial statements' and 'Elimination of internal control requirements': SOX was designed to improve the accuracy of financial statements and strengthen internal controls, so these options contradict the purpose of the Act and are unlikely to be correct.