Question

Which of the following laws makes it mandatory for organizations to demonstrate that there are controls in place to prevent misuse and detect any potential problems?

A) Sarbanes-Oxley Act
B) Trade Expansion Act of 1962
C) Electronic Communications Privacy Act of 1986
D) Central Intelligence Agency Act
E) U.S.A. Patriot Act

Answer 1

The Sarbanes-Oxley Act requires organizations to have controls to prevent misuse and detect problems, responding to major corporate accounting scandals.

Step-by-step explanation:

The law that makes it mandatory for organizations to demonstrate that there are controls in place to prevent misuse and detect any potential problems is the Sarbanes-Oxley Act. Passed in 2002 in response to major accounting scandals with companies such as Enron and WorldCom,

the Sarbanes-Oxley Act aims to protect investors from accounting fraud by requiring public corporations to provide reliable financial information. It establishes strict auditing and financial regulations to prevent and detect corporate misconduct.