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 violation of the Sarbanes-Oxley Act?

Implementing internal controls over financial reporting

Destroying audit documents before the end of the required retention period

Establishing an independent audit committee

Certifying financial statements by the CEO and CFO

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Verified step by step guidance

Understand the Sarbanes-Oxley Act (SOX): The Sarbanes-Oxley Act was enacted to improve corporate governance and accountability. It includes provisions to prevent fraud, ensure accurate financial reporting, and establish internal controls. Key requirements include document retention, independent audit committees, and CEO/CFO certification of financial statements.

Review the options provided: Analyze each option to determine whether it aligns with the requirements of the Sarbanes-Oxley Act or violates its provisions.

Option 1: 'Implementing internal controls over financial reporting' - This is a requirement under SOX to ensure accurate and reliable financial reporting. It is not a violation.

Option 2: 'Destroying audit documents before the end of the required retention period' - SOX mandates the retention of audit documents for a specified period. Destroying these documents prematurely violates the Act.

Option 3 and 4: 'Establishing an independent audit committee' and 'Certifying financial statements by the CEO and CFO' - Both are requirements under SOX to enhance transparency and accountability. These actions comply with the Act and are not violations.