Internal Control Legislation
Several Elements of the Foreign Corrupt Practices

question 41

Essay

Internal control legislation
Several elements of the Foreign Corrupt Practices Act and the Sarbanes-Oxley Act are listed below. Place an "X" in the appropriate column to indicate which Act is most closely associated with each element. If an item applies to both, place an "X" in both columns. $$\begin{array} { | l | l | l | } \hline & \begin{array} { c } \text { Foreign Corrupt } \\\text { Practices }\end{array} & \begin{array} { c } \text { Sarbanes- } \\\text { Oxley }\end{array} \\\hline \text { Became law in } 2002 & & \\\hline \begin{array} { l } \text { Board of directors must be notified of internal } \\\text { control weaknesses }\end{array} & & \\\hline \text { Bribery was a primary motivation } & & \\\hline \text { Corporate scandals were a primary motivation } & & \\\hline \text { Defines reasonable assurance } & & \\\hline \text { Mandates specific SEC disclosures } & & \\\hline \text { Passed in } 1977 & & \\\hline \begin{array} { l } \text { Requires companies to maintain an adequate internal } \\\text { control system }\end{array} & & \\\hline \text { Signatures cannot be delegated } & & \\\hline \text { Violations can result in fines and imprisonment } & & \\\hline\end{array}$$

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Definitions:

Consumption Bundle

A mix of various goods and services selected by consumers based on their preferences and budget limitations.

Slope

The rate at which one variable changes in relation to another, representing the steepness of a line on a graph.

Indifference Curves

Graphical representations of different bundles of goods between which a consumer is indifferent, showing preferences.

Consumption Bundle

A set of goods or services that an individual considers purchasing, given their income and the prices of those goods/services.