A code of ethics for financial professionals is important under Sarbanes-Oxley because:
A) It strengthens the relationship between financial professionals and shareholders
B) It supports the certification of financial statement requirement
C) It decreases the likelihood of whistleblowing
D) It enhances the ethics of the audit committee

Question

Quizplus · Accepted Answer

A code of ethics for financial professionals supports the certification of financial statement requirement, which is a key provision of the Sarbanes-Oxley Act. This requirement increases transparency and accountability in financial reporting, which is necessary to rebuild investor trust after the numerous financial scandals that occurred in the early 2000s. While a code of ethics may also strengthen relationships with shareholders and enhance the ethics of the audit committee, these are not the primary reasons why it is important under Sarbanes-Oxley. Additionally, a code of ethics should not decrease the likelihood of whistleblowing, as whistleblowing is important for ensuring that fraudulent or unethical behavior is brought to light and addressed appropriately.

A Code of Ethics for Financial Professionals Is Important Under