Question

match each of the following sox requirements to the corresponding objective by entering the appropriate letter in the space provided. a. counteract incentives for fraud. b. reduce opportunities for error and fraud. c. encourage good character. 1 establish a hotline for employees to report questionable acts 2 increase maximum fines to $5 million 3 require management to report on effectiveness of internal controls 4 legislate whistle - blower protections. 5 require external auditors report on effectiveness of internal controls

Explanation:

1. An employee hotline for reporting questionable acts creates a way to catch fraud/errors, reducing their opportunities to go undetected.
2. Higher financial penalties deter fraud by counteracting the potential financial incentives for committing it.
3. Management reporting on internal controls ensures these controls work, reducing the chance for errors/fraud.
4. Whistle-blower protections encourage employees with good character to come forward about misconduct without fear of retaliation.
5. External auditor validation of internal controls ensures these controls are effective, reducing opportunities for errors and fraud.

Answer:

1. B. Reduce opportunities for error and fraud.
2. A. Counteract incentives for fraud.
3. B. Reduce opportunities for error and fraud.
4. C. Encourage good character.
5. B. Reduce opportunities for error and fraud.