Internal Control Systems Are Recommended but Not Required of Firms

question 22

True/False

Internal control systems are recommended but not required of firms subject to the Sarbanes-Oxley Act.

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Definitions:

Return

The document filed with the IRS that reports income, expenses, and other pertinent tax information. Returns are required by law to be filed annually for an individual or business with reportable income.

Earnings and Profits

A measure used for tax purposes to determine a corporation's ability to pay dividends to its shareholders out of its net assets.

Distributions

Payments made from a fund or account to its beneficiaries, such as dividends or withdrawals.

Dividend

A portion of a company's earnings distributed to its shareholders.