The Sarbanes–Oxley Acta. requires the SEC to establish a federaloversight board for the accounting industry.b. requires CEOs to certify periodic financialstatements.c. subjects auditors, accountants, andemployees to imprisonment for destroyingfinancial documents.d. prohibits many types of consulting servicesby accounting firms.e. All of the above are true.

The Sarbanes–Oxley Acta. requires the SEC to establish a federaloversight board for the accounting industry.b. requires CEOs to certify periodic financialstatements.c. subjects auditors, accountants, andemployees to imprisonment for destroyingfinancial documents.d. prohibits many types of consulting servicesby accounting firms.e. All of the above are true.

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter1: Comprehensive Cases

Section1.11: New Century Financial Corporation

Problem 3Q

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The Sarbanes–Oxley Act of 2002 prohibits public accounting firms from providing which ofthe following services to an audit client?a. Bookkeeping services.b. Internal auditing services.c. Valuation services.d. All of the above.
The Sarbanes–Oxley Act of 2002 generally prohibits public accounting firms froma. Acting in a managerial decision-making role for an audit client.b. Auditing the firm’s own work on an audit client.c. Providing tax consulting to an audit client without audit committee approval.d. All of the above.
What is a function of the Accounting Standards Board (AcSB)? Question 15 options: It overlooks the accounts department of the federal government. It certifies individuals to provide accounting services. It provides relief to banks during financial crisis. It ensures that accounting firms do not separate their consulting and auditing businesses. It makes rules and policies for accounting firms and businesses.
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Match each of the following provisions of the Sarbanes-Oxley Act (SOX) with its description. Major Provisions of the Sarbanes-Oxley Act Descriptions 1. Oversight board 2. Corporate executive accountability 3. Auditor rotation 4. Nonaudit services 5. Internal control a. Executives must personally certify the company’s financial statements. b. Audit firm cannot provide a variety of other services to its client, such as investment advising. c. PCAOB establishes standards related to the preparation of audited financial reports. d. Lead audit partners are required to change every five years. e. Management must document the effectiveness of procedures that could affect financial reporting.
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Accounting firms may not audit the corporation for which they provide regular accounting services. True or False?
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The Sarbanes-Oxley Act Created the Private Company Accounting Board. Allows accountants to audit and to perform any type of consulting work for a public company. Stipulates that violators of the act may serve 20 years in prison for securities fraud. Requires that an outside auditor must evaluate a public company’s internal controls.
Why do you think the SEC requires companies to disclose fees paid to independent accountingfirms for audit and consulting services? What must be disclosed?
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