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

How did complying with the Sarbanes-Oxley Act benefit Viper Motorcycle Company?

It reduced the company's reporting requirements to the SEC.

It improved the company's internal controls and increased investor confidence.

It eliminated the need for external audits.

It allowed the company to avoid paying federal income taxes.

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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, enhance the accuracy of financial reporting, and restore investor confidence after major corporate scandals. It primarily focuses on internal controls, financial transparency, and accountability.

Identify the benefits of complying with SOX: Companies that comply with SOX typically experience improved internal controls, which help prevent fraud and errors in financial reporting. This compliance also increases investor confidence as it ensures the company is adhering to strict regulatory standards.

Evaluate the options provided in the problem: Analyze each option to determine which aligns with the benefits of SOX compliance. For example, reducing reporting requirements to the SEC or eliminating external audits contradicts the purpose of SOX, which emphasizes stricter oversight and transparency.

Focus on the correct answer: The correct answer highlights improved internal controls and increased investor confidence, which are direct outcomes of SOX compliance. These benefits align with the Act's goals of enhancing corporate governance and financial integrity.

Conclude the analysis: By complying with SOX, Viper Motorcycle Company likely strengthened its internal processes, reduced risks of financial misstatements, and gained trust from investors, which are critical for long-term success and stability.