Georgia Assessments for the Certification of Educators GACE Practice Test

The Sarbanes-Oxley Act of 2002:

1. Deregulated public utilities

2. Reduced tariffs on trade among North American countries

3. Vastly reduced the financial reporting obligations that corporations face

4. Was intended to fight corporate and accounting fraud

The correct answer is: Deregulated public utilities

The Sarbanes-Oxley Act of 2002 was primarily aimed at enhancing corporate accountability and transparency in response to major corporate scandals. Its main goal was to combat corporate and accounting fraud, establishing stricter regulations for financial reporting and governance within publicly traded companies. This law introduced measures such as the requirement for enhanced financial disclosure, the establishment of the Public Company Accounting Oversight Board (PCAOB), and regulations that hold executives accountable for the accuracy and completeness of their financial reports. While providing a context for the other options, one can see that the act did not deregulate public utilities, nor did it reduce tariffs under trade agreements like NAFTA. Furthermore, it did not lessen the financial reporting obligations that corporations face; in fact, it significantly increased those obligations. The intention behind the Sarbanes-Oxley Act was to ensure that corporations are held to a higher standard of accuracy and accountability to protect investors and restore confidence in the financial markets after the scandals of the early 2000s.