Which of the Following Is Not a Provision of (Nor

question 20

Multiple Choice

Which of the following is not a provision of (nor an outgrowth of) the Sarbanes-Oxley Act?

• A) A public company's annual report must contain a separate disclosure that assesses the company's internal controls.
• B) Management is essentially responsible for establishing and maintaining internal controls.
• C) A company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO) can be held criminally responsible if their firm's financial statements are fraudulent.
• D) A company must prepare a balance sheet, an income statement, a statement of stockholders' equity, and a statement of cash flows.
• E) A new body, the Public Company Accounting Oversight Board, oversees and investigates the audits and auditors of public companies.

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Definitions:

LIFO Inventory Method

"Last In, First Out," an inventory costing method where the last items purchased are the first ones sold, affecting the cost of goods sold and ending inventory value.

Cost Of Goods Sold

The direct costs tied to the production of products sold by a company, including materials and labor.

Merchandise Inventory

Merchandise Inventory includes goods that are purchased and held for resale by a retail or wholesale business, representing one of the primary sources of revenue.

FIFO

An inventory valuation method where the first items purchased or produced are the first ones sold, impacting the cost of goods sold and inventory valuation.