Section 404 of the Sarbanes-Oxley Act of 2002 prescribes that

Question

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Section 404 of the Sarbanes-Oxley Act of 2002 requires companies to provide a report on the effectiveness of their internal control over financial reporting in their annual report. This report must be attested to by an external auditor. Section 404 of the Sarbanes-Oxley Act of 2002 requires that companies must include in their annual report a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting. In addition, the report must include an assessment of the effectiveness of the internal control structure and procedures for financial reporting. This section aims to reduce the risk of financial fraud by improving the transparency and accuracy of financial reporting. A is incorrect because the Act does not require this; it only recommends it. C is incorrect because while insider trading is regulated under the Act, it does not prescribe a timeline for disclosure before the trade. D is incorrect because the Act requires auditors to be rotated less frequently than normal.

Section 404 of the Sarbanes-Oxley Act of 2002 Prescribes That