Understanding Section 302 of the Sarbanes-Oxley Act

The Sarbanes-Oxley Act mandates that upper management, specifically the CEO and CFO, are responsible for the accuracy of financial statements and the establishment of internal controls. They must certify the correctness of these statements through written documentation. This requirement clarifies the responsibility of management for financial statements, a topic that was previously debated.

Who is primarily responsible for the financial statements according to Section 302 of the Sarbanes-Oxley Act?

• The Shareholders

• The Auditors

• The Board of Directors

• The CEO and CFO

What must the CEO and CFO certify about the financial statements?

• They are audited by a third party

• They are materially correct

• They are prepared by the finance team

• They are approved by the board

What is included in the written statements by management?

• A list of all company assets

• A summary of the company's history

• Certifications of financial accuracy and completeness

• A forecast of future earnings

Before the Sarbanes-Oxley Act, who was debated to be responsible for financial statements?

• The CEO

• The Auditors

• The Shareholders

• The Legal Team

What did the Sarbanes-Oxley Act clarify about financial statement responsibility?

• It is the responsibility of the auditors

• It is the responsibility of the shareholders

• It is the responsibility of the IT department

• It is the responsibility of management