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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

How has the Sarbanes-Oxley Act (SOX) most significantly affected the responsibilities of accountants in public companies?

It reduced the documentation requirements for internal controls.

It allowed accountants to provide both audit and consulting services to the same client without restrictions.

It increased the accountability of accountants for the accuracy of financial statements.

It eliminated the need for external audits of public companies.

Previous problemNext problem

Verified step by step guidance

Understand the purpose of the Sarbanes-Oxley Act (SOX): SOX was enacted in 2002 to improve corporate governance and accountability in response to major financial scandals. Its primary goal is to ensure the accuracy and reliability of financial reporting by public companies.

Analyze the responsibilities of accountants under SOX: Accountants are required to ensure the accuracy of financial statements and compliance with internal controls. SOX emphasizes accountability and transparency in financial reporting.

Evaluate the incorrect options: The statement that SOX reduced documentation requirements for internal controls is false; SOX actually increased these requirements. Similarly, SOX prohibits accountants from providing both audit and consulting services to the same client to avoid conflicts of interest. Lastly, SOX did not eliminate the need for external audits; it reinforced their importance.

Focus on the correct answer: SOX significantly increased the accountability of accountants for the accuracy of financial statements. This includes certifying the reliability of financial reports and ensuring compliance with internal controls.

Summarize the impact: The Sarbanes-Oxley Act has fundamentally changed the role of accountants in public companies by holding them to higher standards of accountability and requiring stricter adherence to internal controls and financial reporting accuracy.