Financial Accounting
3rd Edition
ISBN: 9780078025549
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 4.1BE
To determine
To Match: Each of the following provisions of the Sarbanes-Oxley Act (SOX) with its description.
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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.
Which of the following is not a provision of the Sarbanes-Oxley Act as to the responsibility of a company's top managers?
Question 3 options:
They must establish formal procedures to receive, retain, and address any information that may affect the company's accounting.
They must certify that they are primarily responsible for the company's internal controls over financial reporting.
They must certify that the company's financial statements are fairly presented.
They may deny responsibility for certain financial reporting matters if they are not knowledgeable about the proper accounting procedures for those transactions.
E10B. BUSINESS APPLICATION Match the items with the related statements that follow.
1. Safeguards the firm's assets and ensure
the reliability of its accounting records.
2. Holds that the chief executive officer,
the chief financial officer, and the audi-
tors of a public company responsible for
fully documenting and certifying the
company's system of internal controls.
3. States that it is responsible for estab-
lishing and maintaining adequate inter-
nal control over financial reporting.
a. Management's responsibility
b. Section 404 of Sarbanes-Oxley Act
c. Independent accountant's audit
d. Internal control
4. Includes an examination of internal
controls.
Chapter 4 Solutions
Financial Accounting
Ch. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - What is meant by the fraud triangle, and what can...Ch. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 8RQCh. 4 - What is meant by separation of duties?Ch. 4 - Prob. 10RQ
Ch. 4 - Prob. 11RQCh. 4 - Prob. 12RQCh. 4 - Prob. 13RQCh. 4 - Prob. 14RQCh. 4 - Prob. 15RQCh. 4 - Prob. 16RQCh. 4 - Prob. 17RQCh. 4 - Prob. 18RQCh. 4 - Prob. 19RQCh. 4 - Prob. 20RQCh. 4 - Prob. 21RQCh. 4 - 22.What are two primary reasons that the companys...Ch. 4 - Prob. 23RQCh. 4 - Prob. 24RQCh. 4 - Prob. 25RQCh. 4 - Prob. 26RQCh. 4 - Prob. 27RQCh. 4 - Describe the operating, investing, and financing...Ch. 4 - Prob. 29RQCh. 4 - Prob. 30RQCh. 4 - Prob. 4.1BECh. 4 - Match each of the following components of internal...Ch. 4 - Prob. 4.3BECh. 4 - Prob. 4.4BECh. 4 - During the year, the following sales transactions...Ch. 4 - Prob. 4.6BECh. 4 - Prob. 4.7BECh. 4 - Prob. 4.8BECh. 4 - Prob. 4.9BECh. 4 - Prob. 4.10BECh. 4 - Prob. 4.11BECh. 4 - Prob. 4.12BECh. 4 - Prob. 4.13BECh. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - On January 12, Ferrell Incorporated obtains a...Ch. 4 - Prob. 4.17BECh. 4 - Prob. 4.18BECh. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Below are several amounts reported at the end of...Ch. 4 - Prob. 4.6ECh. 4 - Prob. 4.7ECh. 4 - Prob. 4.8ECh. 4 - Prob. 4.9ECh. 4 - Prob. 4.10ECh. 4 - Prob. 4.11ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Below are cash transactions for Goldman...Ch. 4 - Prob. 4.17ECh. 4 - Prob. 4.18ECh. 4 - Consider the following information: 1.Service...Ch. 4 - Prob. 4.20ECh. 4 - Prob. 4.1APCh. 4 - Prob. 4.2APCh. 4 - Prob. 4.3APCh. 4 - Prob. 4.4APCh. 4 - Prob. 4.5APCh. 4 - Prob. 4.1BPCh. 4 - Prob. 4.2BPCh. 4 - Prob. 4.3BPCh. 4 - Prob. 4.4BPCh. 4 - Prob. 4.5BPCh. 4 - Prob. 4.1APCPCh. 4 - Prob. 4.2APFACh. 4 - Prob. 4.3APFACh. 4 - Prob. 4.4APCACh. 4 - Prob. 4.5APECh. 4 - Prob. 4.7APWC
Knowledge Booster
Similar questions
- Match each of the numbered descriptions 1 through 7 with the term or phrase it best reflects. Indicate your answer by writing the letter A through G for the term or phrase in the blank provided. A. Ethics B. Fraud triangle C. Prevention D. Internal controls E. Sarbanes-Oxley Act 1. Requires the SEC to pay whistleblowers. 2. Examines whether financial statements are prepared using GAAP; it does not ensure absolute accuracy of the statements. 3. Requires documentation and verification of internal controls and increases emphasis on internal control effectiveness. 4. Procedures set up to protect company property and equipment, ensure reliable accounting, promote efficiency, and encourage adherence to policies. 5. A less expensive and more effective means to stop fraud. 6. Three factors push a person to commit fraud: opportunity, pressure, and rationalization. 7. Beliefs that distinguish right from wrong.arrow_forwardPlease answer all 3 subparts Question 1 (i) Which of the following statements is true?A. Conflicts of interests between management and stakeholders can result in bankruptcies or major frauds.B. It is the responsibility of internal audit to design and monitor controls that reasonably assure that objectives are met.C. Corporate Governance addresses the principal-agent relationship between management and directors on the one hand and the relationship between the company and suppliers on the other.D. The management board apprves the mission, vision, objectives and strategy of the entity. (ii) Which one of the following is NOT a reason for having board committees?A. An increase in the accountability of the board to the firm by reducing individual free-riding and enabling outside directors.B. A better performance of the board of directors by allowing a better monitoring through greater separation from management.C. Bringing a focus and appropriate expertise and specialisation to the…arrow_forwardMatch each of the numbered descriptions 1 through 7 with the term or phrase it best reflects. Indicate your answer by writing the letter A through G for the term or phrase in the blank provided. A. Ethics. B. Fraud triangleC. Prevention.arrow_forward
- Which of the following is NOT a major component of the Sarbanes-Oxley Act? Executive responsibility for accurate financial reporting. Accounting regulation. Mandating external financial audits for all companies. Formation of an audit committee.arrow_forwardWhich of the following statements is correct? A.The external auditor is responsible for the preperation of a company's financial statements. B.Audit commitees are now compulsory for the top 500 companies C.An audit commitee may be responsible for reviewing policies on internal control procedures D.Corporate governance can provide assurances that management is accountable for the actionsarrow_forwardSection 404(a) of the Sarbanes–Oxley Act requires management toissue a report on internal control over financial reporting. Identify the specific Section404(a) reporting requirements for management.arrow_forward
- 2. How might management and internal auditors assess each one of the following? I. The independence and competence of the board of directors II.The competence of accounting personnel III.Whether company employees are adhering to the company’s code of conduct please no plagiarism. 3-5 sentences is enough. Thanksarrow_forwardWhich of the following best describes the responsibility of the CPA in performingcompilation services for a company?(1) The CPA has to satisfy only himself or herself that the financial statements wereprepared in conformity with accounting standards.(2) The CPA must understand the client’s business and accounting methods andread the financial statements for reasonableness.(3) The CPA should obtain an understanding of internal control and perform testsof controls.(4) The CPA is relieved of any responsibility to third partiesarrow_forwardAn audit committee isa. Composed of internal auditors.b. Composed of members of the audit team.c. Composed of members of a company’s board of directors who are not involved in theday-to-day operations of the company.d. A committee composed of persons not associating in any way with the client or the boardof directors.arrow_forward
- The Sarbanes-Oxley Act A. requires the firm's CFO to personally vouch for the firm's accounting statements. B. All of the above. C. requires corporations to have more independent directors. D. prohibits auditing firms from providing other services to clients. E. requires corporations to have more independent directors and requires the firm's CFO to personally vouch for the firm's accounting statements.arrow_forwardThe CAE for Sargon Products reports administratively to the CFO and functionally to the audit committee. The scope of the internal audit function assurance services includes financial, operational, and compliance engagements. Is the internal auditors’ objectivity regarding accounting-related matters impaired in each of the situations described below? Briefly explain your answer. a. The internal auditors are frequently asked to make accounting entries for complex transactions that the company’s accountants do not have the expertise to handle. b. A staff accountant reconciles the company’s monthly bank statements. An internal auditor reviews the bank reconciliations to make sure they are completed properly.arrow_forward$1: In addition to controls being specific, they may be broad, such as policies regarding code of ethics.$2: The auditor is concerned only with those policies and procedures that affect the assertions embodied within the entity's financial statements hence, management's view of internal control is broader.$3: In every financial statement audit, an auditor should obtain an understanding of internal control, even for audits of small owner-managed businesses that employ only one or few accounting personnel. A: Ifall statements are correct.B-If only one statement is correct.C- If only two statements are correct.D- If all statements are incorrect.arrow_forward
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