Which of the following statements is TRUE of the Sarbanes-Oxley Act?
A) Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients.
B) Those who commit securities fraud must be sentenced to 10 years in prison.
C) All private and foreign companies must issue an internal control report evaluated by an outside auditor.
D) The Public Company Accounting Oversight Board oversees the work of auditors of public companies.

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) to oversee the work of auditors of public companies. Option A is incorrect as the Act restricts accounting firms from providing both auditing and consulting services to their public company clients. Option B is incorrect as the Act does not mandate a specific sentence for those who commit securities fraud. Option C is incorrect as the Act only requires public companies to issue an internal control report evaluated by an outside auditor.

Which of the Following Statements Is TRUE of the Sarbanes-Oxley