A firm that opts to "go dark" in response to the Sarbanes-Oxley Act:

Question

a. must continue to provide audited financial statements to the public.

b. must continue to provide a detailed list of internal control deficiencies on an annual basis.

c. can provide less information to its shareholders than it did prior to "going dark".

d. can continue publicly trading its stock but only on the exchange on which it was previously listed.

e. ceases to exist.

Answer 1

c. can provide less information to its shareholders than it did prior to "going dark".

When a firm chooses to "go dark" in response to the Sarbanes-Oxley Act, it means that the firm decides to deregister its securities and no longer file periodic reports with the Securities and Exchange Commission (SEC). By going dark, the firm can provide less information to its shareholders and the public than it did prior to the deregistration. This includes fewer financial disclosures and reduced reporting requirements.

Option a is incorrect because once a firm goes dark, it is no longer required to provide audited financial statements to the public.

Option b is incorrect because going dark relieves the firm from the obligation to provide a detailed list of internal control deficiencies on an annual basis.

Option d is incorrect because going dark often involves delisting from major exchanges, and the firm's stock may no longer be publicly traded.

Option e is incorrect because going dark does not mean the firm ceases to exist. It simply means that it chooses to stop reporting to the SEC and reduces its public reporting obligations.