Understanding Sarbanes-Oxley Compliance

Medium Corporate Governance Regulatory Environment

XYZ Corporation has recently been in the news due to its governance practices. The Management Discussion and Analysis (MD&A) section of its annual report has drawn scrutiny from investors regarding the clarity and transparency of its reporting. As a result, a regulatory body has initiated a review of XYZ Corporation's practices in relation to compliance with corporate governance standards.

The review specifically focuses on the company's adherence to the principles set forth in the Sarbanes-Oxley Act (SOX), which aims to increase transparency in financial reporting and hold management accountable for the accuracy of financial information. Given this context, which of the following statements about the regulatory requirements under SOX is accurate?

The Sarbanes-Oxley Act requires that all publicly-traded companies have an independent audit committee.

SOX mandates that CEO and CFO must forfeit bonuses awarded during a period of financial restatement.

The Sarbanes-Oxley Act does not apply to companies with a market capitalization below $100 million.

Hint

Submitted4.9K

Correct2.9K

% Correct60%