Final answer:
The Sarbanes-Oxley Act includes internal controls, independent audits, and whistleblower protection to reduce opportunities for fraud.
Step-by-step explanation:
The Sarbanes-Oxley Act (SOX) includes several aspects that help reduce opportunities for fraud:
- Internal Controls: SOX requires public companies to establish and maintain strong internal controls over financial reporting. These controls help prevent and detect fraudulent activities by ensuring accurate and reliable financial information.
- Independent Audits: SOX mandates that public companies have their financial statements audited by external independent auditors. This helps enhance the credibility and accuracy of the financial information provided.
- Whistleblower Protection: SOX provides protection to employees who report suspected fraudulent activities within their organizations. This encourages employees to come forward with information about potential fraud.