Which of the Following Is Not a Provision of the Sarbanes-Oxley

question 18

Multiple Choice

Which of the following is not a provision of the Sarbanes-Oxley Act?

• A) Executives can avoid penalties for fraud by declaring personal bankruptcy.
• B) Stiffer penalties for fraud in terms of monetary fines and jail time decrease the incentive to commit fraud.
• C) Public companies must adopt a code of ethics for senior financial officers.
• D) Management must issue a report that indicates whether internal controls are effective at preventing errors and frauD.
• Executives cannot avoid monetary penalties by declaring personal bankruptcy.

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Definitions:

Actual Fixed Overhead Costs

The real costs incurred for fixed overhead during a specified accounting period.

Budgeted Activity

The planned level of output or activity for a specific period, used for planning and control purposes.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected wage, multiplied by the actual hours worked.

Labor Efficiency Variance

The difference between the actual labor hours taken to produce a good or service and the standard labor hours expected, multiplied by the labor rate.