3
QuizMultiple Choice

Financial System and Financial Intermediaries

Question 3 • Introduction to Careers in Finance

The Sarbanes-Oxley Act is mainly intended to _____.

Answer
A
encourage whistleblowers to come forward
B
alert the SEC of possible corporate irregularities
C
self-enforce the accountability cycle
D
make it more difficult to commit some kinds of stock fraud

Explanation

The Sarbanes-Oxley Act was passed to strengthen corporate financial reporting and internal controls after major accounting scandals. These requirements make certain kinds of accounting and stock fraud more difficult to commit or conceal. Encouraging whistleblowers and alerting the SEC can be related to enforcement, but they are not the Act’s main purpose.

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