Section 404 of the Sarbanes-Oxley Act of 2002 Is Considered

question 47

Multiple Choice

Section 404 of the Sarbanes-Oxley Act of 2002 is considered controversial because:

• A)sensitive corporate information has to be published,which may be detrimental to a company.
• B)a company has to significantly increase its budget to comply with Section 404.
• C)the procedure for complying with Section 404 is lengthy,complicated,and time consuming.
• D)Section 404 results in diminished corporate responsibility of the officers of a company.

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to transform raw materials into finished goods.

Processing Department

A division within a company where raw materials are transformed into finished products through a series of operations or processes.

Equivalent Units

A concept used in manufacturing and product costing that represents a partial unit of production, making it easier to quantify and cost incomplete production.

Step-Down Method

An allocation method used in cost accounting to distribute overhead costs to various departments in a sequential order based on the level of service provided.