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In Response to Accounting Scandals in 2002, the Federal Government

question 155

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In response to accounting scandals in 2002, the federal government passed legislation requiring that corporate directors have a certain level of expertise with financial information and mandating that chief executive officers personally certify the accuracy of financial statements. What is the name of this legislation?


Definitions:

Activity Levels

The volume of production or the level of sales activity within a company, which can affect various costs and pricing strategies.

High-low Method

An accounting technique used to estimate variable and fixed costs by analyzing the lowest and highest levels of activity and their associated costs.

Mixed Cost

An expense that contains both fixed and variable components, changing in total with the level of activity but not in a directly proportional manner.

High-low Method

A method employed in accounting that calculates variable and fixed expenses by analyzing the maximum and minimum activity levels.

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