asked 188k views
4 votes
True or False.
SOX prohibits bookkeeping services for audit clients

asked
User Morry
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7.6k points

1 Answer

3 votes

Final answer:

The statement is true; SOX prohibits bookkeeping services for audit clients to maintain the independence of the auditor and avoid conflicts of interest.

Step-by-step explanation:

The statement is true. The Sarbanes-Oxley Act (SOX) does prohibit bookkeeping services for audit clients. It's part of a broader set of regulations established to enhance the integrity and transparency of financial information and to prevent conflicts of interest within public companies. Specifically, SOX Section 201 details the prohibited activities for auditors, including bookkeeping or other services related to the accounting records or financial statements of the audit client. This is to ensure the independence of the auditor and to avoid any potential conflicts that might arise if the auditor is also responsible for creating the financial documents they are auditing.

answered
User Yodish
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8.6k points
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