Which of the Following Statements Is True of the Sarbanes-Oxley

question 10

Multiple Choice

Which of the following statements is true of the Sarbanes-Oxley Act?

• A)Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients.
• B)Those who commit securities fraud must be sentenced to 10 years in prison.
• C)All private and foreign companies must issue an internal control report evaluated by an outside auditor.
• D)Auditors of public companies are under the scrutiny of the Public Company Accounting Oversight Board.

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Definitions:

Common Shares

Equity securities that represent ownership in a company, entitling the holder to vote at shareholders' meetings and to share in the company's profits through dividends.

Dividends Declared

Refers to the announcement by a company's board of directors of the payment of a dividend to shareholders, specifying the size and date of the payment.

Adjusted Trial Balance

A financial statement listing all accounts and their final balances after adjusting entries are made, ensuring the total debits equal total credits.

Adjusting Entries

Bookkeeping entries recorded at the close of a fiscal period to assign earnings and outlays to the timeframe in which they happened.