Which of the Following Statements Is True of Title II

question 70

Multiple Choice

Which of the following statements is true of Title II of the Sarbanes-Oxley Act?

• A)It allows public accounting firms to audit a company whose CEO was employed by that accounting firm within the past 12 months.
• B)It encompasses the Public Company Accounting Oversight Board and allows publicly traded companies to be audited independently.
• C)It requires senior auditors to rotate off an account every five years and junior auditors every seven years.
• D)It permits auditors to keep written communications between management and themselves private.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Common Stock

A type of equity security that represents ownership in a corporation, with rights to vote on corporate matters and receive dividends.

Consolidated Income Statement

A financial statement that summarizes the revenue, expenses, and profits of a parent company and its subsidiaries.

Bonds Payable

A long-term debt instrument issued by a company or government agency, promising to pay its holder a specified sum of money at a future date plus periodic interest payments.