The Sarbanes-Oxley Act applies to which of the following types of companies?

• A. Privately held companies worldwide
• B. All companies listed on any global stock exchange
• C. Nonprofit organizations in the United States
• D. Publicly traded companies in the United States

Answer: (D)

Verified step by step guidance

1. Understand the Sarbanes-Oxley Act (SOX): The Sarbanes-Oxley Act was enacted in 2002 to improve corporate governance and accountability, primarily in response to major corporate scandals. It applies to publicly traded companies in the United States.
2. Clarify the scope of SOX: The Act is designed to regulate companies that are publicly traded on U.S. stock exchanges, ensuring transparency in financial reporting and protecting investors from fraudulent practices.
3. Eliminate incorrect options: Privately held companies worldwide, all companies listed on any global stock exchange, and nonprofit organizations in the United States are not subject to SOX regulations. These entities are outside the scope of the Act.
4. Focus on the correct category: Publicly traded companies in the United States are required to comply with SOX provisions, including internal controls, financial disclosures, and audits.
5. Conclude the application: The Sarbanes-Oxley Act specifically targets publicly traded companies in the United States to enhance accountability and prevent corporate fraud.