Question

17) Congress passed this federal law for the purpose of preventing financial statement fraud, to make financial reports more transparent and to strengthen the internal control of public companies.

A) Foreign Corrupt Practices Act of 1977
B) The Securities Exchange Act of 1934
C) The Sarbanes-Oxley Act of 2002
D) The Control Provision of 1998

Answer 1

The Sarbanes-Oxley Act of 2002 was established to prevent financial statement fraud and to offer more transparent financial reporting, directly responding to the corporate accounting scandals of the early 2000s.

Step-by-step explanation:

The federal law passed by Congress to prevent financial statement fraud, enhance financial report transparency, and strengthen the internal controls of public companies is the Sarbanes-Oxley Act of 2002. This legislation was a response to major accounting scandals involving corporations such as Enron, Tyco International, and WorldCom.

The government designed Sarbanes-Oxley to protect investors by increasing confidence in the financial information released by public corporations.

This act was enacted in response to major accounting scandals involving companies like Enron, Tyco International, and WorldCom, which had shaken public confidence in financial information provided by public corporations. Sarbanes-Oxley established regulations and requirements for financial reporting and corporate governance, aiming to protect investors from accounting fraud.