What authority was given to the PCAOB by SOX?

The correct choice highlights the specific mandate given to the Public Company Accounting Oversight Board (PCAOB) by the Sarbanes-Oxley Act (SOX) of 2002. The PCAOB was established as a response to accounting scandals and is tasked primarily with overseeing the audits of public companies to protect investors' interests. This involves setting auditing standards and conducting inspections of audit firms to ensure compliance with applicable regulations.

The authority of the PCAOB to regulate auditing firms is crucial because it helps maintain the integrity and transparency of financial reporting. By overseeing audit practices, the PCAOB aims to restore public confidence in the financial reporting process, ensuring that audits are conducted with diligence and in accordance with established standards. This is particularly important for public companies that have a significant impact on the financial markets and investors.

In contrast, the other options reflect broader or different aspects of corporate oversight that fall outside the specific remit of the PCAOB. For example, regulating financial reporting pertains more to the principles and frameworks that guide how financial statements are prepared and presented, while enforcing corporate governance relates to the policies and rules applied within a corporation's board and management structure. Controlling stock market trading involves different regulatory bodies such as the Securities and Exchange Commission (SEC) and does