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

According to Viper Motorcycle Company's CEO, how did complying with the Sarbanes-Oxley Act benefit the company?

It reduced the company's need for financial disclosures.

It improved the company's internal controls and increased investor confidence.

It enabled the company to bypass external audits.

It allowed the company to avoid paying federal income taxes.

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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. It requires companies to establish strong internal controls, ensure accurate financial reporting, and undergo external audits.

Analyze the benefits of SOX compliance: Compliance with SOX helps companies improve their internal controls, which reduces the risk of fraud and errors in financial reporting. This, in turn, increases investor confidence in the company's financial statements.

Evaluate the options provided in the problem: Review each option to determine which aligns with the benefits of SOX compliance. For example, reducing financial disclosures or bypassing external audits contradicts the purpose of SOX, as it emphasizes transparency and accountability.

Focus on the correct answer: The correct answer highlights improved internal controls and increased investor confidence, which are direct benefits of SOX compliance. This aligns with the goals of the legislation.

Conclude the reasoning: By complying with SOX, Viper Motorcycle Company likely strengthened its financial reporting processes, reassured investors, and enhanced its reputation in the market.