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 features is required by the Sarbanes-Oxley Act?

Exemption of public companies from financial disclosures

Establishment of an independent audit committee within the board of directors

Mandatory quarterly dividend payments to shareholders

Elimination of all internal audits

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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, primarily in response to major corporate scandals. It focuses on enhancing transparency, internal controls, and the reliability of financial reporting.

Review the key provisions of SOX: One of the critical requirements of SOX is the establishment of an independent audit committee within the board of directors. This committee oversees the company's financial reporting process and ensures compliance with regulations.

Analyze the options provided: Evaluate each option against the requirements of SOX. For example, SOX does not exempt public companies from financial disclosures; instead, it mandates stricter reporting standards. Similarly, SOX does not require mandatory quarterly dividend payments or eliminate internal audits.

Identify the correct feature: Based on the provisions of SOX, the establishment of an independent audit committee within the board of directors is a required feature. This committee plays a vital role in ensuring the integrity of financial reporting and compliance.

Conclude the analysis: The correct answer is the establishment of an independent audit committee within the board of directors, as it aligns with the goals and requirements of the Sarbanes-Oxley Act.