Which of the Following Statements Regarding Auditors Is FALSE

question 38

Multiple Choice

Which of the following statements regarding auditors is FALSE?

• A)The Sarbanes-Oxley Act called on the SEC to force companies to have audit committees that are dominated by outside directors and required that at least one outside director have a financial background.
• B)Whether information is material has been defined in the courts as referring to whether the information would have been a significant factor in an investor's decision about the value of the security.
• C)CEOs and CFOs must return bonuses or profits from the sale of stock or the exercise of options during any period covered by statements that are later restated.
• D)The law is especially strict with regard to takeover announcements,prohibiting any insider with nonpublic information about a pending or ongoing tender offer from trading on that information or revealing it to someone who is likely to trade on it.

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Definitions:

Organizational Behavior Modification

The use of behavioral techniques to reinforce positive work behavior and discourage unhelpful work behavior.

Law of Effect

A principle in psychology stating that behaviors followed by favorable consequences become more likely, while behaviors followed by unfavorable consequences become less likely.

Behavioral Perspective

A view in psychology focusing on observable behaviors and the ways in which they are learned through interactions with the environment.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, thereby influencing the likelihood of that behavior occurring again.