Which of the Following Is Not a Violation of the Sarbanes-Oxley

question 33

Multiple Choice

Which of the following is not a violation of the Sarbanes-Oxley Act (SOX) ? The management at Folding Squid Technologies

• A) asked their auditors to make recommendations for the redesign of their information technology system and to aid in the implementation process.
• B) hired the manager from the external audit team as company CFO twelve months after the manager had worked on the audit.
• C) selected the company's Chief Financial Officer to chair the audit committee.
• D) did not mention to auditors that the company had experienced significant losses due to fraud during the past year.

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Definitions:

Flotation Costs

The costs associated with issuing new securities, including underwriting, legal, and registration fees, which affect the net proceeds of the issued securities.

Market Risk Premium

The Market Risk Premium refers to the additional return an investor expects from holding a risky market portfolio instead of risk-free assets. It represents the compensation investors demand for taking on higher risk.

Cost of New Equity

The cost of obtaining additional funding through the issuance of new equity, considering underwriting fees and other issuance costs.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends.