Which of the Following Is NOT a Provision of the Sarbanes-Oxley

question 32

Multiple Choice

Which of the following is NOT a provision of the Sarbanes-Oxley Act of 2002?

• A)Congress established the Public Company Accounting Oversight Board,which has the authority to regulate public accounting firms,establishing audit rules and ethics guidelines.
• B)After five years with a client,the lead audit partner must rotate off the account for at least five years.
• C)Congress established the American Institute of Certified Public Accountants to develop ethical guidelines in a Code of Professional Conduct.
• D)Auditors must communicate regularly and completely with audit committees of their clients and must describe options the firm considers in preparing financial statements.

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business over a certain period.

Operating Leverage

A financial ratio that measures the proportion of fixed costs to variable costs in a company's cost structure, indicating how revenue growth translates into growth in operating income.

EPS Variability

Fluctuations in a company's earnings per share over time, indicating the volatility of its profitability.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the fixed versus variable costs structure of a business.