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 is a provision of the Sarbanes-Oxley Act?

Elimination of the need for external audits

Reduction of penalties for securities fraud

Requirement for management to certify the accuracy of financial statements

Mandate for companies to use cash-basis accounting

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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 in response to major financial scandals. It aims to protect investors by ensuring the accuracy and reliability of corporate financial reporting.

Review the key provisions of SOX: One of the main provisions is the requirement for management to certify the accuracy of financial statements. This ensures that executives take responsibility for the integrity of the financial information provided to stakeholders.

Eliminate incorrect options: The Sarbanes-Oxley Act does not eliminate the need for external audits; in fact, it strengthens audit requirements. It also does not reduce penalties for securities fraud; instead, it increases penalties to deter fraudulent activities. Lastly, it does not mandate companies to use cash-basis accounting; companies typically use accrual accounting for financial reporting.

Focus on the correct provision: The requirement for management to certify the accuracy of financial statements is a key aspect of SOX. This provision ensures accountability and transparency in financial reporting.

Conclude the analysis: Based on the review of the options and the provisions of SOX, the correct answer is the requirement for management to certify the accuracy of financial statements. This aligns with the Act's goal of improving corporate accountability and protecting investors.