Question

1. When Congress passed the Sarbanes-Oxley Act, it imposed greater regulation on public companies and their external auditors and required increased accountability. Which of the following is not provision of the act?

1. The CEO and CFO must certify the fair presentation of the financial statements.
2. Management must establish and document internal control procedures.
3. Auditors and not management must attest to the effectiveness of the internal control structure.
4. The company’s officers may not serve on the audit committee.

Answer 1

Let us evaluate the option:

• Option A: As per section 302 of the act, CEO and CFO must certify the accuracy and fair presentation of the financial report. Hence this is a provision of the act. So Incorrect.
• Option B: As per section 4404(b) of the act, it is the responsibility of the management to implement and maintain, assess and document Internal controls and its procedures. Hence this is a provision of the act. So Incorrect.
• Option C: as per 302 and 404, CEOs and CFOs must attest attest the effectiveness of the internal control. The auditor must attest the report on company' evaluation of its control report. Hence this is not a provision of the act. Hence Correct.
• Option D: The SOX has emphasized on independence of auitors and members of audit committe. Hence, this is a provision of the act. So Incorrect.

So Option C is correct.