Question

Which parts of the Sarbanes-Oxley (SOX) Act may encourage employees to be honest?

a) Increased fines for corporate misconduct
b) Mandated financial reporting guidelines
c) Whistleblower protections
d) Strict penalties for board members

Answer 1

The Sarbanes-Oxley (SOX) Act includes whistleblower protections, increased fines for corporate misconduct, and strict penalties for board members to encourage employees to be honest.

Step-by-step explanation:

The Sarbanes-Oxley (SOX) Act includes several parts that may encourage employees to be honest:

1. Whistleblower protections: These protections provide employees with the ability to report misconduct within an organization without fear of retaliation.
2. Increased fines for corporate misconduct: The act imposes stricter penalties and higher fines for corporate misconduct, which can serve as a deterrent to dishonest behavior.
3. Strict penalties for board members: The act holds board members accountable for their actions and imposes strict penalties for their involvement in fraudulent activities.