The Sarbanes-Oxley Act of 2002 requires a publicly-traded corporation to _____.
A) keep confidential the procedures used to construct and report financial statements.
B) have an internal audit team that render an unbiased (independent) opinion concerning the firm's financial statements
C) have a committee that consists of outside directors to oversee the firm's audits
D) increase the certainty of the expected cash flows
E) adopt the primary goal of stockholder wealth maximization

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act of 2002 requires a publicly-traded corporation to have a committee consisting of outside directors to oversee the firm's audits. This committee must be responsible for the appointment, compensation, and oversight of the work of any registered public accounting firm. The Act also requires the corporation to have an internal audit team, but it doesn't mandate that they render an unbiased opinion on the firm's financial statements. Additionally, the Act doesn't require the corporation to keep confidential the procedures used to construct and report financial statements or to adopt the primary goal of stockholder wealth maximization. Finally, the Act has no direct impact on increasing the certainty of the expected cash flows of a publicly-traded corporation.

The Sarbanes-Oxley Act of 2002 Requires a Publicly-Traded Corporation to _____