Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Question
Chapter 7, Problem 2QC
To determine
Sarbanes-Oxley Act (SOX): SOX is the act passed by the government to address the corporate scandals. This act regulates and assesses the internal
To find: The items that are not part of the definition of internal control.
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Students have asked these similar questions
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.
#24
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.
Chapter 7 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Ch. 7 - Prob. 1QCCh. 7 - Prob. 2QCCh. 7 - Prob. 3QCCh. 7 - Prob. 4QCCh. 7 - Prob. 5QCCh. 7 - Prob. 6QCCh. 7 - Prob. 7QCCh. 7 - Prob. 8QCCh. 7 - Prob. 9QCCh. 7 - Prob. 10QC
Ch. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - What are the five components of internal control?...Ch. 7 - Prob. 4RQCh. 7 - What is separation of duties?Ch. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - How do businesses control cash receipts by mail?Ch. 7 - Prob. 10RQCh. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Defining internal control Internal controls are...Ch. 7 - Prob. 7.2SECh. 7 - Prob. 7.3SECh. 7 - Prob. 7.4SECh. 7 - Prob. 7.5SECh. 7 - Prob. 7.6SECh. 7 - Prob. 7.7SECh. 7 - Prob. 7.8SECh. 7 - Prob. 7.9SECh. 7 - Prob. 7.10SECh. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Evaluating internal control over cash payments...Ch. 7 - Understanding internal control, components,...Ch. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.21APCh. 7 - Prob. 7.22APCh. 7 - Prob. 7.23APCh. 7 - Prob. 7.24APCh. 7 - Prob. 7.25APCh. 7 - Prob. 7.26APCh. 7 - Prob. 7.27BPCh. 7 - Prob. 7.28BPCh. 7 - Prob. 7.29BPCh. 7 - Prob. 7.30BPCh. 7 - Prob. 7.31BPCh. 7 - Prob. 7.32BPCh. 7 - Prob. 7.33CPCh. 7 - Prob. 7.34PSCh. 7 - Prob. 7.2CTDCCh. 7 - Levon Helm was a kind of one-man mortgage broker....Ch. 7 - Prob. 7.1CTCA
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Similar questions
- The external auditor of a company has certain requirements due to Sarbanes-Oxley. Which of the following best describes these requirements? A. The auditor is required to only report weaknesses in the internal control design of the company he or she is auditing. B. The auditor must issue an internal control report on the evaluation of internal controls overseen by the Public Company Accounting Oversight Board C. The auditor in charge can serve for a period of only two years. D. The Public Company Accounting Oversight Board reviews reports submitted by the auditors when no evaluations have been performed.arrow_forwardIndicate whether each of the following statements is true or false. Bribery in the world of business typically happens when an organization or representative of an organization gives financial benefits to an official to gain favor or manipulate a business decision. The Foreign Corrupt Practices Act was implemented in the aftermath of disclosures that businesses were violating the IMA Code of Ethics. Managers are required to follow specific rules issued by the iMA for internal financial reporting. Ethics is more than obeying laws. The Sarbanes-Oxley Act addressed public company accounting reform.arrow_forwardThe Public Company Accounting Oversight Board (PCAOB) was created as part of a series of accounting reforms in the Sarbanes-Oxley Act of 2002. The PCAOB is a Government-created entity with expansive powers to govern an entire industry. Every accounting firm that audits public companies under the securities laws must register with the PCAOB, pay it an annual fee, and comply with its rules and oversight. The PCAOB may inspect registered firms, initiate formal investigations, and issue severe sanctions in its disciplinary proceedings. While the Securities and Exchange Commission (SEC) appoints PCAOB members and has oversight of the PCAOB, it cannot remove PCAOB members at will, but only “for good cause shown,” “in accordance with” specified procedures. The SEC Commissioners, in turn, cannot themselves be removed by the President except for “inefficiency, neglect of duty, or malfeasance in office.” Parties with standing have challenged the constitutionality of the Sarbanes-Oxley Act’s…arrow_forward
- 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 1934arrow_forwardTrue or False Independent Auditor is responsible for preparing the financial statements, establishing and maintaining adequate internal control over financial reporting (ICFR), and evaluating the effectiveness of ICFR. * Under Sarbanes–Oxley Section 301 public company audit committees are directly responsible for the appointment, compensation, and oversight of the work of any registered public accounting firm employed by their company. * Auditors are required by the Security and Exchange Commission to report to the audit committee of the publicly-traded company all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management officials. * CFO and the audit committee depend heavily on one another * Included in the Environment disclosures are the risks and opportunities due to climate change, procurement practices with respect to local suppliers, and anti-corruption *arrow_forwardWhich 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.arrow_forward
- 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 reportingarrow_forward28. You are auditing one of your firm’s clients that is listed on a Stock Exchange. The client has an audit committee formed of three independent non‐executive directors, as recommended by its country’s code of corporate governance. If you believe that a member of this client’s management is involved in fraud, to whom should this matter first be reported? a. Finance manager b. The Internal auditors c. Those charged with governance of the company d. Accounts managerarrow_forwardSection 404 of the Sarbanes-Oxley Act of 2002 (SOX) requires that O public companies disclose if they have adopted a code of ethics for its senior officers. O management of public companies recognize their responsibility for establishing internal controls and provide an assessment of the effectiveness of those internal controls. O public and private companies disclose if they have adopted a code of ethics company-wide. O CEOs and CFOs of publicly traded companies certify the accuracy of their reported financial information.arrow_forward
- 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.arrow_forwardAudit committees have an essential role to play in ensuring the integrity and transparency of corporate reporting. The external auditor will normally report to the audit committee on all the following matters except: Select one: a.Detected frauds. b.Future staff requirements of the audit firm. c.Potential breach of Corporation Act 2001. d.The management responsibility in presenting annual financial reports.arrow_forwardThe 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.arrow_forward
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