The Importance to the Accounting Profession of the Sarbanes-Oxley Act

question 40

Short Answer

The importance to the accounting profession of the Sarbanes-Oxley Act of 2002 is that
a.bribery will be eliminated.
b.management will not be able to override the company's internal controls.
c.firms are required to have an effective internal control system.
d.firms will not be exposed to lawsuits.

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Definitions:

Behavioral Economics

A branch of economics that examines the impact of psychological, cognitive, emotional, cultural, and social influences on the economic choices made by individuals and institutions.

Hedonic Treadmill

The observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.

Richard Easterlin

An economist known for the "Easterlin Paradox," suggesting that beyond a certain income level, happiness does not increase with wealth.

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes, often used when facing complex problems.