Which of the following is not part of Sarbanes–Oxley?a. An increased duty on the part of auditors to identify financial statement fraud.b. A requirement that the CEO and CFO certify the financial statements.c. Increased penalties for destruction of records in federal investigations.d. Increased penalties for mail fraud and criminal violations of the Securities Exchange Actof 1934

Which of the following is not part of Sarbanes–Oxley?a. An increased duty on the part of auditors to identify financial statement fraud.b. A requirement that the CEO and CFO certify the financial statements.c. Increased penalties for destruction of records in federal investigations.d. Increased penalties for mail fraud and criminal violations of the Securities Exchange Actof 1934

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter2: Audits Of High-risk Accounts

Section2.7: Bankrate, Inc.

Problem 5Q

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Which of the following is a provision of the Sarbanes-Oxley Act? a. Lessens penalties for corporate fraud b.Developed the Consumer Financial Protection Bureau c. Recommends codes of ethics for financial reporting in corporations d. Makes fraudulent financial reporting a civil offense e.Requires greater transparency in financial reporting
The Sarbanes-Oxley Act a. created the Private Company Accounting Board. b. allows accountants to audit and to perform any type of consulting work for a public company. c. stipulates that violators of the act may serve 20 years in prison for securities fraud. d. requires that an outside auditor must evaluate a public company’s internal controls.
C. Give an example and explain securities fraud in violation of the Securities Act of ‘33. D. Explain how Enron “cooked the books” with two of its accounting practices
Which of the following statements is true of the Sarbanes−Oxley Act? A. All private and foreign companies must issue an internal control report evaluated by an outside auditor. B. Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients. C. Those who commit securities fraud must be sentenced to 10 years in prison. D. The Public Company Accounting Oversight Board oversees the work of auditors of public companies.
Which of the provisions of Sarbanes Oxley Act of 2002 (SOX) increased the chances that the financial statement auditor would push back against management's aggression in financial reporting? Require audit committees to hire, supervise and terminate auditors. Severe criminal penalties for perpetrators of fraudulent reporting. Requirement that c-level management certify the financial statements. O Require auditors to audit internal controls over financial reporting.
Which of the following is not a Sarbanes-Oxley Actrequirement intended to reduce fraud opportunities?a. Increase fines and jail sentences for fraud perpetrators.b. All public companies establish an audit committee ofindependent directors.c. Management of all public companies evaluates andreports on the effectiveness of internal control overfinancial reporting.d. External auditors of large public companies evaluateand report on the effectiveness of internal control overfinancial reporting.
Which of the following is NOT an implication of Section 302 of SOX?a. Auditors must determine whether changes in internal control have materially affected, or are likely to materially affect, internal control over financial reporting.b. Auditors must interview management regarding significant changes in the design or operation of internal control that occurred since the last audit.c. Corporate management (including the CEO) must certify monthly and annually their organization’s internal controls over financial reporting.d. Management must disclose any material changes in the company’s internal controls that have occurred during the most recent fiscal quarter.
What does the Sarbanes-Oxley Act of 2002 require the CEO and CFO to do? Multiple Choice All of these are requirements of the Sarbanes-Oxley Act of 2002. Take responsibility for signing financial statements. Stipulate that the financial statements do not omit material information. Disclose that they have evaluated the company's internal controls. Disclose that they have notified the company's auditors and the audit committee of the board of any fraud that involves management.
Should the SEC take tolerance on a company that recognizes and reports accounting irregularities and other frauds of the company?
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.
Identify one (1) real-life ‘financial reporting accounting fraud’ that occurred post 1990 (i.e. in the last 30 years), in any country, and answer the following questions: a) Discuss what specific accounting regulations were violated?
Below are several statements about the Sarbanes-Oxley Act (SOX).1. SOX represents legislation passed in response to several accounting scandals in the early 2000s.2. The requirements outlined in SOX apply only to those companies expected to have weak internal controls or to have manipulated financial statements in the past.3. Section 404 of SOX requires both company management and auditors to document and assess the effectiveness of a company’s internal control processes that could affect financial reporting.4. Severe financial penalties and the possibility of imprisonment are consequences of fraudulent misstatement.5. With the establishment of SOX, management now has primary responsibility for hiring an external audit firm.6. The lead auditor in charge of auditing a particular company must rotate off that company only when occupational fraud is suspected.Required:State whether the answer to each of the statements is true or false.