The Sarbanes-Oxley Act (SOX)overhauled incentives and the independence in the auditing process by:
A)requiring the CEO and CFO to return bonuses or profits from the sale of stock that are later shown to be due to misstated financial reports.
B)imposing large compliance costs on small companies.
C)requiring auditing firms to have long-standing relationships with their clients and receive lucrative auditing and consulting fees from them.
D)putting strict limits on the amount of non-audit fees (consulting or otherwise)that an accounting firm can earn from a firm that it audits.

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act put strict limits on the amount of non-audit fees (consulting or otherwise)that an accounting firm can earn from a firm that it audits. This was done in order to minimize any potential conflict of interest that may arise from a closely entwined relationship between the auditor and the firm being audited. The Act aimed to increase the incentives for auditors to provide independent, objective and accurate audit services.

The Sarbanes-Oxley Act (SOX)overhauled Incentives and the Independence in the Auditing