Question

Which of the following is not a provision of the Sarbanes-Oxley Act?

a. Strengthens penalties for corporate fraud
b. Discourages the creation of ethical and legal compliance programs
c. Requires codes of ethics for financial reporting in corporations
d. Makes fraudulent financial reporting a criminal offense e. Requires greater transparency in financial reporting

Answer 1

The Sarbanes-Oxley Act (SOX) strengthened penalties for corporate fraud, made fraudulent financial reporting a criminal offense, and required greater transparency. However, it does not discourage the creation of ethical and legal compliance programs.

Step-by-step explanation:

The Sarbanes-Oxley Act (SOX) was a response to major accounting scandals and aimed to increase confidence in financial information provided by public corporations. The act strengthened penalties for corporate fraud, made fraudulent financial reporting a criminal offense, and required greater transparency in financial reporting. However, one provision not included in the Sarbanes-Oxley Act is discouraging the creation of ethical and legal compliance programs.