There are several aspects of Enron fraud that are dealt with directly in SOX further connecting Enron to reform in the accounting profession.Which of the following is true?
A)Prohibiting the provision of internal audit service for audit clients.
B)Off-balance-sheet financing activities must be disclosed in the notes to the financial statements.
C)Related-party transactions require disclosure in the notes.
D)All of the above.

Question

Quizplus · Accepted Answer

All three options (prohibiting the provision of internal audit service for audit clients, disclosure of off-balance-sheet financing activities in the notes to the financial statements, and disclosure of related-party transactions in the notes) are directly addressed in SOX as a response to the Enron fraud. Prohibiting the provision of internal audit services for audit clients is addressed in Section 201 of SOX, while disclosure of off-balance-sheet financing activities and related-party transactions are addressed in Sections 401 and 407, respectively. Therefore, D, all of the above, is the correct choice.

There Are Several Aspects of Enron Fraud That Are Dealt