PHR · Question #133
What HR data must be carefully accounted in order for public companies to comply with the Sarbanes-Oxley Act?
The correct answer is C. Salaries, training costs, and paid time off. The Sarbanes-Oxley Act requires public companies to accurately report financial data, and HR costs such as salaries, training, and paid time off are direct labor expenditures that must be disclosed and controlled.
Question
What HR data must be carefully accounted in order for public companies to comply with the Sarbanes-Oxley Act?
Options
- ANumber of applicants
- BLabor supply and demand
- CSalaries, training costs, and paid time off
- DNumber of open enrollment participants
How the community answered
(18 responses)- B6% (1)
- C78% (14)
- D17% (3)
Why each option
The Sarbanes-Oxley Act requires public companies to accurately report financial data, and HR costs such as salaries, training, and paid time off are direct labor expenditures that must be disclosed and controlled.
The number of applicants is a recruiting metric with no direct connection to financial reporting obligations under SOX.
Labor supply and demand is a workforce planning concept used in HR strategy, not a financial disclosure requirement under SOX.
Salaries, training costs, and paid time off are labor-related financial expenditures that directly affect a company's financial statements and must be accurately recorded under SOX internal control requirements, particularly Section 404, which mandates controls over financial reporting. Misstatement or omission of these costs could constitute a material weakness in financial controls, subjecting the company to penalties.
Open enrollment participation counts are benefits administration data with no direct impact on the financial statement controls SOX governs.
Concept tested: SOX financial reporting requirements for HR data
Source: https://www.sec.gov/about/laws/soa2002.pdf
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