Question

Markets by nature are very complex. A common way firms and markets are understood which everyone...

Markets by nature are very complex. A common way firms and markets are understood which everyone depend upon is financial information and accounting. In the beginning of the 2000's there were some major accounting scandals in industry, which resulted in a loss of confidence in reported financial information. The Sarbanes-Oxley Act was passed by government in 2002 to address this problem. Review the selections below and choose the one which best characterizes the Sarbanes-Oxley Act. Select the correct answer below:

1) increase confidence in financial information provided by public corporations to protect investors from accounting fraud.

2) address oppressive business practices associated with cartels and oppressive monopolies.

3) provide further clarification to the Sherman Antitrust Act on topics such as price discrimination, price fixing, and unfair business practices.

4) create a commission to help regulate unfair methods of competition in commerce and define what types of competition were legally unfair.

Homework Answers

Answer #1

Ans- A) Sarbanes Oxley Act was passed sk as to protect investors from wrong informations provided by companies. This act deals with corporate responsibility, auditing, accounting regulation and proper disclosure of reports. All this came into limelight after many accounting frauds and scandles took place. Hence this was enacted to bring correct and transparent information to help investors rebuild confidence .

All other options are not the characteristics of this act. This question relates to fact hence all options are not at all related to Sarban oxley act, as it doesnt deal with monopoly , price fixation, competition in the market.

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