B1M3: SOX

Question 1

what is the general purpose of the audit committee?

Answer 1

The audit committee is required for all public companies. they appoint, compensate and oversee the work of independent auditors. They also work in resolving disputes between the auditors and managers. AC must also establish whistle-blower hotlines and a formal way of taking complaints.

Question 2

Why must corporate officials sign off on certain documents?

Answer 2

they must show that they have reviewed the reports, it doesnt contain untrue statements or omit info and the FS are presented fairly in all material respects.

Question 3

what qualifies a financial expert to serve on the audit committee?

Answer 3

education and past experiences in key roles

Question 4

what is important regarding a code of ethics for senior officials?

Answer 4

the issuer must disclose whether the firm has adopted a code of ethics or if they havent and why not. changes to or waivers from the code must be reported on the 8-K

Question 5

criminal penalty for messing with an investigation will result in:

Answer 5

will be fine, imprisoned for not more than 20 years or both

Question 6

criminal penalty for an auditor not retaining all audit and review workpapers for 7 years will result in:

Answer 6

fine, imprisonment of not more than 10 years or both