Which of the Following Is Not a Requirement of a Company's

question 184

Multiple Choice

Which of the following is not a requirement of a company's external auditors under Sarbanes-Oxley?

• A) They must give an opinion that management's assessment that the internal control system over financial reporting is fairly stated.
• B) They must give an opinion that the company maintained an effective internal control system over financial reporting.
• C) They must design and implement an effective information system design.
• D) They cannot perform any brokerage services for the company.

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Definitions:

Accounting Rate

The accounting rate refers to the percentage of return on an investment or project, as determined by accounting methods, which does not necessarily take into account the time value of money.

Cash Flows

The total sum of cash and cash-like assets moving into and out of a company.

Payback Method

An investment appraisal technique that calculates the time required to recover the initial investment from the cash inflows generated by the investment.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.