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 aspect of internal controls for payroll is most directly addressed by the Sarbanes-Oxley Act?

Segregation of duties to prevent fraud and errors

Offering competitive employee benefits

Timely payment of wages to employees

Automating payroll calculations for efficiency

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Verified step by step guidance

Understand the Sarbanes-Oxley Act (SOX): The Sarbanes-Oxley Act was enacted to improve corporate governance and accountability, primarily focusing on preventing fraud and ensuring accurate financial reporting. It emphasizes internal controls and processes to safeguard against errors and fraudulent activities.

Identify the key aspect of internal controls for payroll: Internal controls are procedures and mechanisms designed to ensure the accuracy, reliability, and security of payroll processes. One critical aspect is the segregation of duties, which involves dividing responsibilities among different individuals to reduce the risk of fraud or errors.

Analyze the options provided: Evaluate each option in the context of SOX. Offering competitive employee benefits and timely payment of wages are important for employee satisfaction but are not directly related to fraud prevention or internal controls. Automating payroll calculations improves efficiency but does not address fraud prevention as directly as segregation of duties.

Connect segregation of duties to SOX: Segregation of duties aligns with SOX's emphasis on preventing fraud and ensuring accurate financial reporting. By separating responsibilities (e.g., one person processes payroll while another reviews and approves it), the risk of fraudulent activities or errors is minimized.

Conclude that segregation of duties is the correct answer: Based on the principles of SOX and the importance of internal controls, segregation of duties is the aspect most directly addressed by the Sarbanes-Oxley Act in the context of payroll.