The Sarbanes-Oxley Act Requires That Auditors of Certain Publicly Traded

question 53

True/False

The Sarbanes-Oxley Act requires that auditors of certain publicly traded companies in the United States perform an integrated audit that includes providing assurance on both the financial statements and on compliance with laws and regulations.

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Definitions:

Accounting System

A structured process of collecting, recording, summarizing, and reporting financial transactions of a business or individual.

Accrual Basis of Accounting

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash transactions occur.

Cash Basis

An accounting method where revenue is recorded when cash is received, and expenses are recorded when cash is paid out.

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances for accruals and deferrals that are not recorded through regular transactions.