What is a provision of the Sarbanes-Oxley Act of 2002 regarding internal controls?

The Sarbanes-Oxley Act of 2002, often referred to as SOX, was enacted to enhance corporate governance and financial practices, primarily in response to major corporate fraud cases. A key provision of the Act emphasizes the importance of internal controls over financial reporting. Specifically, it requires that management establishes and maintains adequate internal controls and is responsible for assessing the effectiveness of these controls.

By mandating that management must cooperate with auditors in establishing and maintaining internal controls, the Act ensures accountability and enhances the accuracy and reliability of financial reporting. This collaboration is critical to detecting and preventing fraud, as well as ensuring compliance with regulations.

The other choices do not align with the provisions of the Sarbanes-Oxley Act. For instance, the Act does not dictate specific growth expectations for companies or allow for the reporting of inflated earnings without consequences. Furthermore, while investor rights are an important aspect of corporate governance, the Act does not grant investors direct dictation over internal management processes. This context underscores why the correct answer highlights the collaborative effort required between management and auditors in maintaining internal controls.