Question

which of the following statements is true of section 201 of the sarbanes - oxley act? select one: a. it requires a company’s management to file an internal control report with its annual report each year. b. it prohibits various forms of professional services that are determined to be consulting rather than auditing. c. it mandates that members of public company audit committees should be independent with a total absence of current or prior business relationships. d. it provides the codes of ethics for senior financial officers.

Explanation:

• Option a: Requiring management to file an internal control report with the annual report is related to Section 404 of the Sarbanes - Oxley Act, not Section 201.
• Option b: Section 201 of the Sarbanes - Oxley Act prohibits accounting firms from providing certain non - audit (consulting - type) services to audit clients to ensure auditor independence. This matches the description in option b.
• Option c: The requirements for audit committee member independence are covered in other sections (like Section 301) of the Sarbanes - Oxley Act, not Section 201.
• Option d: The codes of ethics for senior financial officers are addressed in Section 406 of the Sarbanes - Oxley Act, not Section 201.

Answer:

b. It prohibits various forms of professional services that are determined to be consulting rather than auditing.