Which members of management are required to sign off on financial statements under SOX?

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Study for the Texas Aandamp;M University (TAMU) ACCT229 Exam. Get exam-ready with flashcards, detailed explanations, and multiple choice questions. Enhance your understanding and boost your confidence!

Under the Sarbanes-Oxley Act (SOX), the responsibility for the accuracy and completeness of financial statements rests primarily with the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) of a company. This legislative measure was enacted in response to significant corporate scandals to enhance transparency in financial reporting and to protect investors from fraud. By requiring the CEO and CFO to sign off on the financial statements, the law ensures that these top executives are directly accountable for the financial information that their companies provide to the public.

This requirement emphasizes the importance of internal controls and the integrity of financial reporting. It serves as a deterrent against fraudulent reporting because these executives could face criminal penalties for false or misleading financial disclosures. The accountability mechanism provided by SOX is critical for maintaining investor confidence and the overall health of financial markets.

In contrast, other roles mentioned in the incorrect answers, such as the COO (Chief Operating Officer) and CTO (Chief Technology Officer), are not mandated by SOX to sign off on financial statements, as their primary responsibilities lie in operations and technology rather than financial reporting. Furthermore, all board members are not required to sign off on financial statements, as this responsibility is concentrated on the CEO and CFO, who have direct oversight over