Required information\ Learning Objective 01-05 Explain factors that encourage high-quality financial reporting.\ Skip to question\ [The following information applies to the questions displayed below.]\ \ Factors encouraging high-quality financial reporting include conceptually based financial accounting standards, external auditors, financial reporting reforms (such as the Sarbanes-Oxley Act), ethical management, and professional accounting organizations that prescribe ethical conduct and license practitioners.\ \ Financial Reporting Reform\ \ \ Knowledge Check 01\ Which of the following statements about the Sarbanes-Oxley Act (SOX) is (are) true?\ \ Note: Select all that apply.\ \ Check All That Apply\ \ It requires the rotation of the lead partner on an audit engagements every seven years.\ \ It requires the rotation of the lead partner on an audit engagements every seven years.\ \ It created the PCAOB to regulate auditiors of public companies and the types of services they furnish to clients.\ \ It created the PCAOB to regulate auditiors of public companies and the types of services they furnish to clients.\ \ It provides for stiff criminal penalties for violators of SOX.\ \ It provides for stiff criminal penalties for violators of SOX.\ \ It requires auditors to document the company's internal controls.