The Sarbanes-Oxley Act Requires Management to Certify That It Has

question 31

Multiple Choice

The Sarbanes-Oxley Act requires management to certify that it has informed the auditor and audit committee of any

• A)related party transactions.
• B)significant deficiencies in business practices.
• C)significant deficiencies in internal controls.
• D)specific business or industry risk.

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (materials, labor, and overhead) in product costs, excluding fixed costs.

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and a portion of all overhead costs.

Variable Costing

A system in accounting that considers solely the changing costs associated with production (direct materials, direct labor, and variable manufacturing overhead) in the calculation of product prices.

Net Operating Income

Net Operating Income, often abbreviated as NOI, is a financial metric that calculates a company’s profit after subtracting operating expenses excluding taxes and interest.