Question

______ made it important for businesses to have an ethics code, something in writing about what one ought to do, and what to strive for.

• A. The Ethics & Code Conduct Act, $2000$
• B. The Sarbanes-Ethics of Code Conduct Act, $2001$
• C. The Sarbanes-Oxley Act, $2002$
• D. None of above

Answer 1

The correct option is C The Sarbanes-Oxley Act, $2002$

In the United States of America, Section $406$ of the Sarbanes Oxley Act, $2002$ requires public companies to disclose whether they have codes of ethics, and also to disclose any waivers of those codes for certain members of senior management. Section $406$(a) of the Regulation requires companies to disclose:

— whether they have a written code of ethics that applies to their principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions;

— any waivers of the code of ethics for these individuals; and

— any changes to the code of ethics.

If companies do not have a code of ethics, they must explain why they have not adopted one. A company may file its codes as an exhibit in the annual report, post the codes on the company's website, or agree to provide a copy of the codes upon request and without charge.