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:

Instalment Payments

Instalment payments are payments made towards the purchase of an item or repayment of a loan that are spread out over a period of time in fixed amounts.

Interest Expense

The cost incurred by an entity for borrowed funds, often related to bonds, loans, and credit lines, and is typically reported on the income statement.

Carrying Amount

The monetary value of an asset or liability as recorded on the balance sheet, factoring in depreciation, amortization, or impairment.

Unamortized Premium

The portion of a bond premium that has not yet been amortized (gradually written off) over the period of the bond's life.