Internal control systems are:
A)Developed by the Securities and Exchange Commission for public companies.
B)Developed by the Small Business Administration for non-public companies.
C)Developed by the Internal Revenue Service for all U.S.companies.
D)Required by Sarbanes-Oxley (SOX)to be documented and certified if the company's stock is traded on an exchange.
E)Required only if a company plans to engage in interstate commerce.

Question

Quizplus · Accepted Answer

Internal control systems are required by Sarbanes-Oxley (SOX) to be documented and certified if the company's stock is traded on an exchange. This regulation was established in response to various corporate accounting scandals such as Enron and WorldCom, in order to improve financial reporting accuracy and increase investor confidence.

Internal Control Systems Are