Question

1 — origins and ethics
learning objective: identify ethical principles related to accounting.
which of the following was created by the government in response to unethical behavior by companies such as enron and worldcom?
a.) international financial reporting standards
b.) generally accepted accounting principles
c.) the financial accounting standards board
d.) the sarbanes - oxley act

Explanation:

• International Financial Reporting Standards (IFRS) are global accounting standards, not a response to Enron/WorldCom.
• Generally Accepted Accounting Principles (GAAP) are long-standing U.S. accounting standards, predating these scandals.
• The Financial Accounting Standards Board (FASB) is a private body that sets GAAP, created before the scandals.
• The Sarbanes-Oxley Act (SOX) was enacted by the U.S. government in 2002 directly in response to the unethical accounting and corporate misconduct at Enron, WorldCom, and other firms, to strengthen corporate governance and financial reporting rules.

Answer:

d.) The Sarbanes-Oxley Act