Question

Under the Sarbanes-Oxley Act, which requirement must an accounting firm that audits public companies meet?

A. The firm cannot provide several nonaudit services, such as bookkeeping, to its audit clients

B. The firm cannot audit a company for more than five years

C. The firm cannot use any forms of advertising to obtain new clients

D. The auditor must be retained by the CFO rather than the audit committee

Answer 1

Under the amendment of Sarbanes Oxley Act, few changes were made related to the accounting firm that audits public companies, some of them are

1. Lead audit partner of the firm should be rotate after every 5 years, which were 7 years before amendment.

2. Firm cannot provide several non audit services to audited clients.

Option A is right, B cannot be termed as right as it is saying firm cannot audit a company for more than five years but in the amendment lead auditor should be rotated after 5 years.