As a result of the Sarbanes-Oxley Act, there was a reduced likelihood of fraudulent financial reporting by firms.

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act (SOX) was enacted in response to a series of high-profile accounting scandals, such as Enron and WorldCom. The act aimed to improve corporate governance and financial reporting to prevent fraudulent practices. Among other things, SOX requires companies to establish internal controls over financial reporting, and increases the penalties for securities fraud. While SOX cannot guarantee an end to all instances of fraudulent financial reporting, it has been shown to have a positive impact on reducing the likelihood of such practices. Therefore, the statement is true.

As a Result of the Sarbanes-Oxley Act, There Was a Reduced