What Is the Main Purpose of the Sarbanes-Oxley Act of 2002

question 19

Multiple Choice

What is the main purpose of the Sarbanes-Oxley Act of 2002?

• A) To increase the accuracy and reliability of corporate disclosures of financial information.
• B) To ensure that CEOs are adequately compensated for the risks they face in terms of corporate governance.
• C) To amend NAFTA to be more favorable to U.S. interests.
• D) To limit the ability of drug companies to engage in direct-to-consumer advertising.
• E) To limit the ability of the media to obtain confidential corporate information.

---

Definitions:

Variable

A quantity that can change or vary, often used in mathematics and statistical analysis as well as in economic models to represent changing economic indicators.

Fixed Cost

Costs that do not vary with the level of production or sales over a certain range, such as rent, salaries, and insurance.

Direct Materials

Direct materials are raw materials that are directly traceable to the manufacturing of a product and are a significant component of its cost.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of activity or volume of production.