Homework Clinic
Social Science Clinic => Business => Management => Topic started by: go.lag on Jul 7, 2018
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What is the Sarbanes-Oxley Act? How does it affect incentive plans? Do you support the legislation? Why or why not?
What will be an ideal response?
Question 2
One way to reduce uncertainty is to increase the number of specific and general environmental forces that are interconnected. Because, when forces begin to interact, the environment becomes more predictable.
Indicate whether the statement is true or false
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Answer to Question 1
Answer: The Sarbanes-Oxley Act of 2002 affects how employers formulate their executive incentive programs. Congress passed Sarbanes-Oxley to inject a higher level of responsibility into executives' and board members' decisions. It makes them personally liable for violating their fiduciary responsibilities to their shareholders. The act also requires CEOs and CFOs of a public company to repay any bonuses, incentives, or equity-based compensation received from the company during the 12-month period following the issuance of a financial statement that the company must restate due to material noncompliance with a financial reporting requirement stemming from misconduct.
Answer to Question 2
FALSE