The Sarbanes-Oxley Act (SOX)stiffened Penalties for Providing False Information By

question 27

Multiple Choice

The Sarbanes-Oxley Act (SOX) stiffened penalties for providing false information by:

• A)requiring the CEO and CFO to return bonuses or profits from the sale of stock that are later shown to be due to misstated financial reports.
• B)imposing large compliance costs on small companies.
• C)requiring auditing firms to have long-standing relationships with their clients and receive lucrative auditing and consulting fees from them.
• D)putting strict limits on the amount of non-audit fees (consulting or otherwise)that an accounting firm can earn from a firm that it audits.

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Definitions:

Forward Contract

A financial derivative that represents a customized agreement to buy or sell an asset at a predetermined future date and price.

Spot Rate

The current market price for exchanging one currency for another for immediate delivery.

Balance Sheet Presentation

The method by which a company's financial position is detailed in its balance sheet, listing assets, liabilities, and equity.

Bonds

Fixed income investments representing loans made by an investor to a borrower, typically corporate or governmental.