Question

What entity is tasked with the

responsibility of making sure
that accounting is done properly?
The investors
bank
The CEO
The government

Answer 1

The auditing firm hired by a company, the board of directors, and outside investors are primarily responsible for ensuring proper accounting practices.

Therefore, the correct answer is: option "The investors".

Step-by-step explanation:

The entity responsible for ensuring that accounting is done properly is, primarily, the auditing firm that a company hires. Auditing firms review a company's financial records and certify their accuracy.

The board of directors, elected by shareholders, provides oversight for corporate executives and is the first line of corporate governance.

Meanwhile, outside investors, particularly large shareholders, play a role in overseeing the company's financial practices.

In the event of a failure in these bodies, as seen with Lehman Brothers, the government steps in with legislation like the Sarbanes-Oxley Act, established after accounting scandals such as Enron and WorldCom, to protect investors against accounting fraud.

The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and financial regulations for public companies. Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices.