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 one of the following is an unintended result of the Sarbanes-Oxley Act?

Establishment of the Public Company Accounting Oversight Board (PCAOB)

Requirement for CEOs and CFOs to certify financial statements

Increased compliance costs for smaller public companies

Enhanced penalties for fraudulent financial activity

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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 corporate scandals. It introduced stricter regulations for public companies, including requirements for financial reporting and internal controls.

Review the intended outcomes of SOX: The Act aimed to enhance transparency, prevent fraud, and restore investor confidence. Key provisions include the establishment of the PCAOB, certification of financial statements by CEOs and CFOs, and enhanced penalties for fraudulent activities.

Identify unintended consequences: While SOX achieved its intended goals, it also led to unintended results, such as increased compliance costs. Smaller public companies, in particular, faced challenges due to the financial burden of implementing the required internal controls and audits.

Analyze the options provided: Evaluate each option to determine whether it aligns with the intended goals of SOX or represents an unintended consequence. For example, the establishment of the PCAOB and certification of financial statements were direct goals of SOX, while increased compliance costs were an unintended result.

Conclude based on analysis: The correct answer is 'Increased compliance costs for smaller public companies,' as this was not an intended goal of SOX but rather a side effect of its implementation.