The Sarbanes-Oxley Act (SOX)overhauled Incentives and the Independence of the Auditing

question 19

Multiple Choice

The Sarbanes-Oxley Act (SOX) overhauled incentives and the independence of the auditing process 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.

---

Definitions:

Motivation

The driving force behind individuals' actions, desires, and needs, influencing how they behave and what they strive to achieve.

Consumer Behavior

the study of how individuals or groups select, purchase, use, and dispose of goods and services, as well as the factors that influence these decisions and behaviors.

Low-involvement Purchase

A buying decision made by consumers on products that are perceived as low risk and require minimal thought or effort.

Expensive

High in price or requiring a significant amount of money to purchase.