Which of the Following Statements Is Most Correct

question 16

Multiple Choice

Which of the following statements is most correct?

• A) Sarbanes-Oxley established a new Federal agency, the Public Company Auditing Board, to audit public companies' financial statements.
• B) Sarbanes-Oxley prohibited investment banks from allowing their analysts to make recommendations on stocks the investment banks do business with.
• C) Sarbanes-Oxley requires that either the CEO or CFO hand-deliver the annual and quarterly financial statements to the SEC.
• D) Sarbanes-Oxley requires that auditors maintain extensive records to document that their consulting and auditing services for a given company are not conflicting.
• E) Sarbanes-Oxley prohibits auditors from providing consulting services to the companies they audit.

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Definitions:

Derivative Positions

Financial contracts whose value is derived from the value of an underlying asset.

Distressed Firms

Companies experiencing financial or operational difficulties, often characterized by liquidity problems, default, or bankruptcy risks.

Convertible Bonds

Debt securities issued by a corporation that can be converted into a predetermined number of the company's shares at certain times during the bond's life, usually at the discretion of the bondholder.

Currency Speculation

The act of buying, selling, or holding currencies with the expectation that their value will change to make a profit.