Question

Which of the following statements is true of a public company's financial statements?

A) Sarbanes-Oxley requires the CEO only to certify the financial statements.
B) Sarbanes-Oxley requires the CFO only to certify the financial statements.
C) Sarbanes-Oxley requires the CEO and CFO to certify the financial statements.
D) Sarbanes-Oxley neither requires the CEO nor the CFO to certify the financial statements.

Answer 1

The Sarbanes-Oxley Act requires the CEO and CFO to certify a public company's financial statements.

Step-by-step explanation:

The correct statement is C) Sarbanes-Oxley requires the CEO and CFO to certify the financial statements.

The Sarbanes-Oxley Act, passed in 2002, was enacted to restore public confidence in financial reporting after major accounting scandals. One of its key provisions is that both the CEO and CFO of a public company are required to personally certify the accuracy and completeness of the company's financial statements. This certification is known as the CEO and CFO certification, and it holds the top executives accountable for the financial information provided to investors.

By making the CEO and CFO personally responsible for the financial statements, Sarbanes-Oxley aims to prevent financial fraud and protect investors by ensuring transparency and reliability in public company financial reporting.