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 renders an unbiased opinion concerning the firm's governance policy
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

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 renders an unbiased opinion concerning the firm's governance policy
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

Quizplus · Accepted Answer

The Sarbanes-Oxley Act of 2002 requires a publicly-traded corporation to have a committee that consists of outside directors to oversee the firm's audits. This committee is called the Audit Committee and its main purpose is to provide oversight to the financial reporting process and ensure the accuracy, completeness, and reliability of the financial statements. The other options mentioned in the question are not requirements of the Sarbanes-Oxley Act.

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