The SOX Act Requires External Auditors ________

question 136

Multiple Choice

The SOX Act requires external auditors ________.

• A)provide information-processing consulting services
• B)to form an audit committee which includes the CEO
• C)to be a member of the executive committee
• D)to report to the client's audit committee rather than the client's management team

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Definitions:

Equivalent Annual Cost

A financial analysis tool used to compare the cost effectiveness of different assets by breaking down their costs into equivalent annual amounts.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time for an investment.

Internal Rate of Return

Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of potential investments, representing the discount rate at which the net present value of costs (cash outflows) and benefits (cash inflows) of an investment equal zero.

Net Working Capital

A financial metric that represents the difference between a company's current assets and current liabilities.