The Sarbanes-Oxley Act Was Passed in 2002 to Regulate the Accounting

question 90

Multiple Choice

The Sarbanes-Oxley Act was passed in 2002 to regulate the accounting profession.Although the act encompasses many aspects,what is one of the parts of the act?

• A)Requires rotation every ten years of the lead audit or coordinating partner and the reviewing partner on an audit
• B)Established the Public Company Accounting Oversight Board
• C)Requires all accounting firms to register with the SEC
• D)Prohibits public accounting firms from auditing SEC regulated companies
• E)Excludes certain industries from conducting business with public accounting firms

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Definitions:

Cost Behavior

The way in which a cost reacts or changes when there is a change in the level of business activity.

Variable Costing Format

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Short-Term Pricing Decisions

Pricing strategies and choices made by a business to address immediate market demands, competitive pricing, or product lifecycle stages.

Total Variable Costs

The sum of all costs that vary directly with the level of production or sales volume, such as materials and labor costs.