Question

The Sarbanes-Oxley Act of $2002$ made it important for businesses to have an _______________.

• A. Ethics code
• B. Code of conduct
• C. Code of practice
• D. Business ethics

Answer 1

The correct option is A Ethics code

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 $406\left(a\right)$ 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.