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 required by the Sarbanes-Oxley Act?

Only private companies must comply with the Act.

Management must certify the accuracy of financial statements.

Companies must eliminate all internal audits.

Public companies are exempt from external 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 for public companies. It aims to protect investors by ensuring the accuracy and reliability of financial reporting.

Identify the key requirements of SOX: One of the main provisions of the Act is that management must certify the accuracy of financial statements. This includes signing off on the financial reports and ensuring they are free from material misstatements.

Clarify the scope of SOX: The Act applies to public companies, not private companies. Public companies must comply with its provisions, including external audits and maintaining effective internal controls.

Evaluate the incorrect options: Companies are not required to eliminate internal audits; instead, SOX emphasizes the importance of internal controls. Public companies are not exempt from external audits; external audits are a critical part of compliance.

Conclude the correct answer: Based on the requirements of SOX, the correct answer is that management must certify the accuracy of financial statements, as this is a fundamental aspect of the Act.