Question

Adhering to a new act passed in 2002, the CEO of Pearsil & Pearsil, a real estate company, now personally certifies the validity of the company's financial statements. Given this information, the CEO most likely follows the_____.

Answer 1

Sarbanes - Oxley Act

Step-by-step explanation:

Sarbanes - Oxley act was enacted in 2002 by the government to protect investors from misleading financial reporting with an intent of fraud.

As per this act, every corporation is required to get the financial statements audited by recognized auditors and comply to all guidelines. Any discrepancy in financial statements could be treated as criminal offence and legal action could be taken against such companies.

In this case, CEO of Pearsil & Pearsil is abiding by Sarbanes Oxley act by personally validating company's financial statements.