A foreign company wants to trade its capital stock in the United States. The company hires a consultant with expertise in SOX in response to which form of risk?

Question

Quizplus · Accepted Answer

The hiring of a consultant with expertise in SOX (Sarbanes-Oxley Act) indicates that the company is concerned about legal and regulatory risk. SOX is a U.S. federal law that sets forth accounting regulations and reporting requirements for publicly-traded companies, aimed at protecting investors and preventing accounting fraud. Since the foreign company wants to trade its capital stock in the U.S., it must comply with SOX regulations. By hiring a consultant with expertise in SOX, the company demonstrates its commitment to meeting these requirements and avoiding legal and regulatory penalties.

A Foreign Company Wants to Trade Its Capital Stock in the United