Question

What is one of the actions that is NOT an objective of the Sarbanes-Oxley Act of...

What is one of the actions that is NOT an objective of the Sarbanes-Oxley Act of 2002?

A. Reducing agency costs in corporations.

B. Restoring ethical conduct within the business sector.

C. Improving the integrity of accounting reporting system within firms.

D. Ensuring that an IRS employee is present at the firm’s headquarters.

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Answer #1

Sarbanes-Oxley:

Enron was well respected and regarded company in its time. People felt proud to work at Enron. It took everyone by surprise after the Enron scandal.

Enron scandal reveled in 2001. The company claimed a revenue of $101 billion in 2000.

The Sarbanes-Oxley Act of 202 was passed after this scandal to bring in accounting regularities and increase disclosures. It has increased transparency and accountability. It has also increased auditing Standards.

In fact, it has been observed that IPO cost has increased after the passing of SOX.

Its enacted to restore ethical conduct within business sector and improve the integrity of accounting reporting system within businesses.

Its not an objective of SOX act to ensure an IRS employee is present at the firm’s headquarters.

Answer: D. Ensuring that an IRS employee is present at the firm’s headquarters.

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