Multiple Choice
The Sarbanes-Oxley Act of 2002 is a governmental response to:
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6. Internal Controls and Reporting Cash
Sarbanes-Oxley Act
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The Sarbanes-Oxley Act increases the accountability of which of the following groups within a corporation?
A
Corporate executives and board of directors
B
Government regulators
C
External customers
D
Entry-level employees
Verified step by step guidance1
Understand the purpose of the Sarbanes-Oxley Act (SOX): The act was enacted in 2002 to improve corporate governance, enhance financial disclosures, and prevent accounting fraud. It primarily focuses on increasing accountability within corporations.
Identify the groups affected by SOX: The act places significant responsibility on corporate executives and the board of directors to ensure accurate financial reporting and compliance with regulations.
Analyze the role of corporate executives and the board of directors: SOX requires these groups to certify the accuracy of financial statements and implement internal controls to prevent fraud. They are held accountable for any misrepresentation or failure to comply.
Evaluate the other options: Government regulators enforce compliance but are not directly held accountable under SOX. External customers and entry-level employees are not the focus of SOX's accountability measures.
Conclude that the correct answer is 'Corporate executives and board of directors,' as they are the primary groups whose accountability is increased under the Sarbanes-Oxley Act.
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