To Help Eliminate Conflicts of Interest, Sarbanes-Oxley Prohibits All the Following

question 8

Multiple Choice

To help eliminate conflicts of interest, Sarbanes-Oxley prohibits all the following activities by audit firms for their clients, except: ______.

• A) the design and implementation of financial information systems.
• B) actuarial services.
• C) management functions and human resources.
• D) having multiple clients whose interests may be adverse to each other.

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Definitions:

Residual Standard Deviation

A measure of the amount of variance in a dataset or predictive model not explained by the model itself.

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 is more volatile than the market.

Information Ratio

A measure of portfolio returns beyond the returns of a benchmark, typically used to assess the skill of a portfolio manager.

Residual Standard Deviation

A measure of the amount of variability or dispersion for individual data points in a regression model that cannot be explained by the predictive equation.