SOX Compliance Quiz

What is the main purpose of auditor independence under SOX?

• To allow auditors to invest in the company

• To avoid conflict of interest and ensure objectivity

• To speed up audits

• To reduce audit fees

Who must certify the accuracy of financial statements under SOX?

• CEO and CFO

• Internal auditor

• Audit committee

• Company secretary

What is required if a company wants to remain listed under SOX?

• A large marketing department

• An audit committee

• A board of investors

• No audit committee is required

How often must the lead audit partner be changed?

• Every year

• Every 3 years

• Every 5 years

• Every 10 years

What does Section 404 of SOX require?

• Annual report on internal control systems

• Use of only one auditor

• Company expansion

• Hiring a tax consultant

What is meant by 'Restrictions on dealing' in SOX?

• Directors must buy shares monthly

• Directors can trade anytime

• Directors are prohibited from trading during sensitive times

• Employees must sell their shares

Which SOX requirement ensures transparency in off-balance sheet financing?

• Section 409

• Section 302

• Audit partner rotation

• Increased financial disclosures

What happens if a company doesn't have an audit committee as per SOX?

• It is fined

• It is disallowed from trading

• It gets tax relief

• It must hire external auditors

Why is audit partner rotation required under SOX?

• To reduce cost

• To increase familiarity with the client

• To maintain fresh perspective and avoid overfamiliarity

• To build long-term relationships

What does the internal control report help prevent?

• Marketing errors

• IT delays

• Weaknesses in financial reporting and fraud

• Product recalls