What does the Sarbanes-Oxley Act require from a code of ethics?

The Sarbanes-Oxley Act, enacted in response to major corporate and accounting scandals, sets stringent standards for ethical conduct and governance in publicly held companies. One of its key requirements is the establishment of a code of ethics that promotes ethical conduct and ensures accurate and timely disclosures. This is vital in restoring public confidence in financial reporting and corporate integrity.

By emphasizing ethical behavior and the accuracy of financial disclosures, the Act aims to prevent fraudulent financial practices, thereby protecting investors and enhancing the reliability of corporate governance. It essentially mandates that companies put in place guidelines that foster transparency and integrity within their operations, making option B the correct answer.

Other options, while relevant to broader business ethics and practices, do not align with the specific requirements set forth by the Sarbanes-Oxley Act. Maximizing shareholder profit, for instance, is a general objective of many companies but not a direct requirement of the Act; the focus is rather on ethical practices and accuracy in reporting. Employment diversity and advertisement standards are also important business considerations but are not addressed by the Sarbanes-Oxley Act in the context of ethical standards and disclosures.