Which of the Following Statements Regarding Auditors Is FALSE

question 41

Multiple Choice

Which of the following statements regarding auditors is FALSE?

• A)The Sarbanes-Oxley Act called on the SEC to force companies to have audit committees that are dominated by outside directors and required that at least one outside director have a financial background.
• B)Whether information is material has been defined in the courts as referring to whether the information would have been a significant factor in an investor's decision about the value of the security.
• C)CEOs and CFOs must return bonuses or profits from the sale of stock or the exercise of options during any period covered by statements that are later restated.
• D)The law is especially strict with regard to takeover announcements,prohibiting any insider,but not outsiders,with nonpublic information about a pending or ongoing tender offer from trading on that information or revealing it to someone who is likely to trade on it.

---

Definitions:

Independent Auditors

External experts who examine the financial records and statements of an organization to ensure accuracy and compliance with applicable standards.

Securities & Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws, regulating the securities industry, and overseeing the stock and options exchanges.

Inventories

Items held for sale in the ordinary course of business, or goods to be used in the production of goods to be sold, including raw materials, work-in-progress, and finished goods.