TRUE OR FALSE 1.

Section 406 requires a US issuer to disclose whether it has a Code of Ethics for its
senior financial officers and, if not, why not. Any changes to the Code of Ethics must be disclosed. True
2. The Sarbanes-Oxley Act (sometimes referred to as the SOA, Sarbox, or SOX) is a U.S. law to protect
investors by preventing fraudulent accounting and financial practices at privately traded companies.
False 3. Section 206 Conflicts of interest of the act states that it shall be lawful for a registered public
accounting firm to perform for an issuer any audit service required by this title, if a chief executive
officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent
position for the issuer, was employed by that registered independent public accounting firm and
participated in any capacity in the audit of that issuer during the one year period preceding the date of
the initiation of the audit. False 4. Based on the officer’s knowledge, the report does not contain any
untrue statement of an immaterial fact or omit to state an immaterial fact necessary in order to make
the statements made, in light of the circumstances under which such statements were made, not
misleading. False 5. According to PCAOB Auditing Standard No. 5 (2007), a significant deficiency should
be classified as a material weakness if, by itself or in combination with other control deficiencies, it
results in more than a remote likelihood that a material misstatement in the company’s annual or
interim financial statements will be prevented or detected. False 6. Each audit committee shall have the
authority to engage independent counsel and other advisers, as it determines necessary to carry out its
duties. True 7. The SOX LITE was made to lessen the cost of complying for SOX Act and amend the sec.
404. True 8. Section 906 (Corporate responsibility for financial statements) introduces severe criminal
sanctions for breaches of s. 302 and s. 404 up to a maximum of a $ 5 000 000 fine and imprisonment for
not more than 10 years for knowingly breaching s. 302 or s. 404 or $ 1 000 000 and as much as 20 years’
imprisonment for wilful breach False 9. The costliest part of the Sarbanes-Oxley Act is Section 404 True
10. A registered public accounting firm may engage in any non-audit service, including tax services, that
is not described in any of paragraphs (1) through (9) of section 201 for an audit client, only if the activity
is approved in advance by the audit committee of the issuer True