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Question 1
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
45% (02:42) correct
55%
(02:49) wrong
based on 278
sessions
History
Date
Time
Result
Not Attempted Yet
Question 2
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
44% (01:15) correct 56%
(01:16) wrong
based on 276
sessions
History
Date
Time
Result
Not Attempted Yet
Question 3
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
12% (01:00) correct 88%
(01:13) wrong
based on 263
sessions
History
Date
Time
Result
Not Attempted Yet
A decade after its passage, the Sarbanes-Oxley Act of 2002 (SOX) is still maligned. As the RAND Corporation and others noted early on, its effects have taken a quantifiable and pronounced toll on smaller businesses that have paid a higher cost on a relative basis for the auditing and accounting fees required for compliance with Section 201 and other sections of the act. Furthermore, the RAND study quantified deregistering in the immediate wake of the act, finding that it occurred more frequently among smaller firms. As the study noted, however, the exit of some small firms from the public sphere, particularly if they had engaged in financial misstatement, may have also increased investor confidence in the remaining market players.
In addition to the adverse effect on small businesses, detractors today cite the effect of SOX on the ability of U.S. firms to compete in the global market, noting the exodus from the NYSE to the less regulated London Stock Exchange, now the true nexus of international finance. More hyperbolically, they suggest the disruption of the free market.
Other more recent charges against the act include its having stood in the way of the creation of new businesses and having cost investors billions of dollars instead of protecting them from losses. Even a 2012 study pointing to the decrease in the number of COOs and the trend toward the elimination of the COO position from the corporate hierarchy chart, most likely in response to Section 302 requirements, blames Sarbanes-Oxley.
In addition to the adverse effect on small businesses, detractors today cite the effect of SOX on the ability of U.S. firms to compete in the global market, noting the exodus from the NYSE to the less regulated London Stock Exchange, now the true nexus of international finance. More hyperbolically, they suggest the disruption of the free market.
Other more recent charges against the act include its having stood in the way of the creation of new businesses and having cost investors billions of dollars instead of protecting them from losses. Even a 2012 study pointing to the decrease in the number of COOs and the trend toward the elimination of the COO position from the corporate hierarchy chart, most likely in response to Section 302 requirements, blames Sarbanes-Oxley.
1. It is possible that the author regards all of the following as conceivably legitimate or reasoned complaints against Sarbanes-Oxley EXCEPT:
(A) the pre-eminence of the London Stock Exchange in international finance.
(B) the burden of audit costs borne particularly heavily by smaller companies.
(C) a decrease in the competitiveness of U.S. firms abroad.
(D) the adverse effect on investors of the early deregistration of many smaller businesses.
(E) a general limiting effect on the creation of new businesses.
(A) the pre-eminence of the London Stock Exchange in international finance.
(B) the burden of audit costs borne particularly heavily by smaller companies.
(C) a decrease in the competitiveness of U.S. firms abroad.
(D) the adverse effect on investors of the early deregistration of many smaller businesses.
(E) a general limiting effect on the creation of new businesses.
2. It can be inferred that Section 302 of the Sarbanes-Oxley Act mentioned in the last paragraph
(A) links the COO position to financial misstatements of the past.
(B) does not require COO participation in oversight requirements.
(C) outlines a new corporate hierarchy relative to financial audits.
(D) undermines a reasonable non-intrusive measure to protect investors.
(E) criticizes previous Securities and Exchange Committee filing requirements.
(A) links the COO position to financial misstatements of the past.
(B) does not require COO participation in oversight requirements.
(C) outlines a new corporate hierarchy relative to financial audits.
(D) undermines a reasonable non-intrusive measure to protect investors.
(E) criticizes previous Securities and Exchange Committee filing requirements.
3. Which of the following best expresses the author’s attitude toward Sarbanes-Oxley?
(A) It has cost businesses billions of dollars while failing to achieve its oversight purpose.
(B) Its greatest impact has been on smaller businesses, which have suffered disproportionately.
(C) It is a source of continued complaints, some of which are inaccurate or overstated.
(D) The negative criticism it has garnered over the years is, in the main, deserved.
(E) Those calling for the early repeal of the act have been validated over the years.
(A) It has cost businesses billions of dollars while failing to achieve its oversight purpose.
(B) Its greatest impact has been on smaller businesses, which have suffered disproportionately.
(C) It is a source of continued complaints, some of which are inaccurate or overstated.
(D) The negative criticism it has garnered over the years is, in the main, deserved.
(E) Those calling for the early repeal of the act have been validated over the years.
RC Butler 2023 - Practice Two RC Passages Everyday.
Passage # 114 Date: 20-Apr-2023
This question is a part of RC Butler 2023. Click here for Details
Passage # 114 Date: 20-Apr-2023
This question is a part of RC Butler 2023. Click here for Details
09 Jun 2023, 06:26
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T5858
Official Explanation
3. Which of the following best expresses the author’s attitude toward Sarbanes-Oxley?
Explanation
Sentence 1 suggests this focus; the remainder of the passage details ways in which the act is maligned or blamed. Throughout, the author shows it as a source of complaints, taking care to note some that are overstated (or “hyperbolic”) and those that may be inaccurate, such as the claim about the negative effects of deregistering.
Choice (A) is an accusation leveled against SOX, but there is no information given in the passage to indicate the author’s agreement with this charge.
Choice (B) is tempting because the author clearly makes this point. Nevertheless, this is just one point among many in the passage, and it is only through the accumulation of those points and the author’s attitude toward them that the author’s attitude as a whole can be accurately inferred.
Choice (D) is incorrect because the author states neither agreement nor disagreement with most charges against SOX, though the author does call at least one of them hyperbolic.
Choice (E) should be eliminated because the author states neither agreement nor disagreement with most charges against SOX, though the author does call at least one of them hyperbolic.
The correct answer is (C).
Explanation
Sentence 1 suggests this focus; the remainder of the passage details ways in which the act is maligned or blamed. Throughout, the author shows it as a source of complaints, taking care to note some that are overstated (or “hyperbolic”) and those that may be inaccurate, such as the claim about the negative effects of deregistering.
Choice (A) is an accusation leveled against SOX, but there is no information given in the passage to indicate the author’s agreement with this charge.
Choice (B) is tempting because the author clearly makes this point. Nevertheless, this is just one point among many in the passage, and it is only through the accumulation of those points and the author’s attitude toward them that the author’s attitude as a whole can be accurately inferred.
Choice (D) is incorrect because the author states neither agreement nor disagreement with most charges against SOX, though the author does call at least one of them hyperbolic.
Choice (E) should be eliminated because the author states neither agreement nor disagreement with most charges against SOX, though the author does call at least one of them hyperbolic.
The correct answer is (C).
