Asked by chris curran on Jul 26, 2024
Verified
Spectrum Paints Inc. is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, the firm is subject to the direct corporate governance requirements of
A) any other public company with which the firm exchanges shares.
B) any state in which the firm does business.
C) the federal government.
D) the state in which the firm incorporated.
Sarbanes-Oxley Act
The Sarbanes-Oxley Act is a United States federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.
Corporate Governance Requirements
Guidelines and rules that dictate how a company is operated and controlled, focusing on the relationship between the board, shareholders, and other stakeholders.
Public Company
A company whose shares are traded freely on a stock market, with disclosure of financials and other significant information to the public.
- Acquire knowledge of the fundamental clauses and mandates outlined in the Securities Exchange Act of 1934 as well as the Sarbanes-Oxley Act of 2002.
- Identify the role of the SEC in regulating public companies and the importance of compliance with its requirements.
Verified Answer
SP
Surabhi PatelAug 01, 2024
Final Answer :
C
Explanation :
The Sarbanes-Oxley Act of 2002 is a federal law that sets forth requirements for all U.S. public company boards, management, and public accounting firms, thereby subjecting Spectrum Paints Inc. to the direct corporate governance requirements of the federal government.
Learning Objectives
- Acquire knowledge of the fundamental clauses and mandates outlined in the Securities Exchange Act of 1934 as well as the Sarbanes-Oxley Act of 2002.
- Identify the role of the SEC in regulating public companies and the importance of compliance with its requirements.