The Sarbanes-Oxley Act of 2002 Requires That the Audit Committee

question 71

Multiple Choice

The Sarbanes-Oxley Act of 2002 requires that the audit committee:

• A)Annually reassess control risk using information from the CPA firm.
• B)Be directly responsible for the appointment,compensation,and oversight of the work of the CPA firm.
• C)Require that the company's CPA firm rotate the partner in charge of the audit.
• D)Review the level of management compensation.

---

Definitions:

Margin of Error

The largest anticipated discrepancy between the actual population parameter and its estimate derived from a sample.

Normal Distribution

A symmetric, bell-shaped distribution of data in which most of the observations cluster around the central peak and the probabilities for values further away from the mean taper off equally in both directions.

Confidence Interval

A statistical range, with a certain level of confidence, that is likely to contain the true value of an unknown parameter.

Standard Error

The standard deviation of the sampling distribution of a statistic, often used to measure the precision of a sample mean.