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) Required only if a company plans to engage in interstate commerce.
D) Developed by the Internal Revenue Service for all U.S. companies.
E) Required by Sarbanes-Oxley (SOX) to be documented and certified if the company's stock is traded on an exchange (a public company).

Question

Quizplus · Accepted Answer

Internal control systems are required to be documented and certified by Sarbanes-Oxley (SOX) if the company's stock is traded on an exchange (a public company). This legislation was passed in response to accounting scandals that took place in the early 2000s, with the goal of increasing transparency and accuracy in financial reporting.

Internal Control Systems Are