The Sarbanes-Oxley Act Requires the CPA Firm to Rotate the Audit

question 105

Multiple Choice

The Sarbanes-Oxley Act requires the CPA firm to rotate the audit partner off of the audit engagement every ________ year(s) .

• A)three
• B)four
• C)five
• D)one

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as materials and labor.

Pretax Income

The income that a company earns before any taxes are deducted, representing the profitability of the company before government intervention.

Break-even Point

The level of production or sales at which total costs equal total revenues, resulting in no profit or loss.

Fixed Costs

Costs that are constant regardless of the volume of goods or services produced by a company, including lease payments and maintenance expenditures.