The Sarbanes-Oxley Act

question 33

Multiple Choice

The Sarbanes-Oxley Act:

• A)prohibits insiders with a fiduciary duty to their shareholders from trading on material non-public information in that stock.
• B)prohibits anyone with nonpublic information about a pending or ongoing tender offer from trading on that information.
• C)overhauls incentive and independence in the auditing process.
• D)requires corporations to consider all stakeholders in corporate governance decisions.

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the accounting records but have not yet been cashed or cleared by the bank.

Depositor's Account

An account maintained by a financial institution on behalf of a depositor, where funds are safely kept for future withdrawals or transactions.

Deposits in Transit

Funds that have been recorded by a company but not yet by its bank, often due to the timing of bank processing.

Days' Sales Uncollected

A financial metric measuring the average number of days it takes for a company to collect its receivables post-sale.