Question

What is a legal advantage to companies that make an effort to comply with stipulations of the 2002 Sarbanes-Oxley (SOX) Act?

Multiple Choice
a.The companies ensure accurate accounting.
b.The companies are more likely to retain experienced personnel.
c.The companies gain significant competitive advantage.
d.The companies can reduce the consequences if an employee does break the law.
e.The companies increase their attractiveness to investors.

Answer 1

Complying with SOX facilitates increased investor confidence and attractiveness due to enhanced transparency and reliability of financial information, aiding in capital raising efforts.

Step-by-step explanation:

The legal advantage to companies that make an effort to comply with stipulations of the 2002 Sarbanes-Oxley (SOX) Act is that the companies increase their attractiveness to investors. By ensuring accurate financial reporting and improving internal controls, SOX compliance boosts investor confidence in the transparency and reliability of a company's financial statements. This increased trust can lead to a more favorable investment climate and potentially enhance the company’s ability to raise capital.