Which of the Following Is a Requirement of the Sarbanes-Oxley

question 21

Multiple Choice

Which of the following is a requirement of the Sarbanes-Oxley Act?

• A)An outside auditor must evaluate the client's internal controls and report on the internal controls as part of the audit report.
• B)The Public Company Oversight Board must conduct audits of public companies.
• C)The accounting firm that audits a public client must also provide consulting services for the same client.
• D)The Public Company Oversight Board must create new accounting standards.

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs - both fixed and variable - in the cost of a product.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross profit but before taxes and interest are deducted.

Absorption Costing

Accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Unit Product Cost

The cost calculated per unit, combining all expenses including materials, labor, and overhead related to the production.