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 one way the Sarbanes-Oxley Act protects employees who report organizational misconduct?

It allows companies to terminate employees without cause.

It prohibits employers from retaliating against whistleblowers.

It exempts small businesses from all reporting requirements.

It requires employees to report misconduct directly to shareholders.

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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 includes provisions to protect whistleblowers who report organizational misconduct.

Focus on the whistleblower protection aspect: SOX prohibits employers from retaliating against employees who report fraudulent activities or violations of securities laws. This protection ensures employees can report misconduct without fear of losing their jobs or facing other forms of retaliation.

Eliminate incorrect options: Review the provided choices and identify which ones do not align with the provisions of SOX. For example, SOX does not allow companies to terminate employees without cause, nor does it exempt small businesses from all reporting requirements.

Analyze the correct option: The correct answer is that SOX prohibits employers from retaliating against whistleblowers. This aligns with the Act's goal of encouraging transparency and ethical behavior in organizations.

Conclude the reasoning: By understanding the purpose and provisions of SOX, it becomes clear that the Act is designed to protect employees who report misconduct, ensuring they are not penalized for doing the right thing.