The Sarbanes-Oxley Act of 2002 attempts to reduce corporate fraud among top-level executives. Comment on the strengths and weaknesses of this act.
What will be an ideal response?
To reduce fraudulent activity in firms, the Sarbanes-Oxley Act strengthened control in areas such as internal monitoring, public auditing, external monitoring, and executive loans. In addition, firms were required to disclose more financial information, and there were new regulations about boards and research analysts. These actions would appear to strengthen the separation of decision control and decision management. The compliance costs of this act have been substantial and have affected the choice of organizational form. The high costs of this act have caused some smaller firms to convert to closely held companies, foreign firms to quit being listed on U.S. stock exchanges, and promote mergers if there are economies of scale in compliance.
You might also like to view...
All of the following were classical economists EXCEPT
A) Adam Smith B) A. C. Pigou C) David Ricardo D) John Maynard Keynes.
Refer to Figure f. A benefit function is plotted in Figure f. The letter D represents the:
A. risk premium of the consumption bundle.
B. expected utility of the consumption bundle.
C. certainty equivalent of the consumption bundle.
D. expected consumption.
Absolute poverty measures vary from country to country. For example, in 2015, the poverty line in the United States for a family of four with two children
was an annual income of $24,250 but economists often use a much lower threshold income of $1 per day when calculating the rate of poverty in poor countries. How is this absolute poverty measured? A) by comparing the amount of goods and services that a household's income can purchase in one country to the amount of goods and services that a household's income can purchase in another country of comparable living standard B) by comparing the amount of goods and services that a household's income can purchase to an objective measure of the amount of income needed to sustain a certain predetermined standard of living C) by comparing the percentage of households living below the poverty line to the total population D) by comparing a household's income to the income required to maintain the average standard of living in a society at a particular time
President Bush removed the United States from the Kyoto Protocol because
a. he did not accept the scientific explanation of global warming b. Congress voted for him to do so c. the protocol did not impose emissions cuts on developing countries d. he believed that the emissions targets were too lenient