Indicate Whether Each of the Following Statements Regarding Internal Controls

question 46

True/False

Indicate whether each of the following statements regarding internal controls is true or false.a)________ The Sarbanes-Oxley Act of 2002 (SOX)requires public companies to evaluate their internal controls and publish those findings with their SEC filings.b)________ The Sarbanes-Oxley Act (SOX)applies to all companies, while the Enterprise Risk Management (ERM)framework is used by public companies only.c)________ Enterprise Risk Management (ERM)is an expansion of the earlier framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).d)________ The COSO framework includes five interrelated components: segregation of duties, quality employees, prenumbered documents, physical controls, and performance evaluations.e)________ Congress passed the Sarbanes-Oxley Act in 2002 (SOX)in response to high profile accounting scandals, such as Enron and WorldCom.

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Definitions:

American Law

The legal system of the United States, including its statutes, regulations, case law, and constitutional provisions.

Insider Trading

The unlawful activity where individuals trade on the stock market for personal gain using private, sensitive information.

Business Judgment Rule

A legal principle that protects the decisions of a corporate board of directors from judicial review as long as those decisions are made within their authority and with a reasonable belief that they were in the best interests of the company.

Currency Trader

An individual or entity that buys and sells currency pairs on the foreign exchange market to profit from exchange rate fluctuations.