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Sarbanes Oxley Act: SOX Corporate Governance

Subjects : certifications, sarbanes-oxley

Instructions:

Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Public companies and company representatives are not permitted to retaliate against an employee in the __ or __ of his/her employment because the employee provided information - participated in an investigation - or participated in a proceeding relat
right of first refusal
terms - conditions
petition - Administrative Review Board - 10
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

2. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
The employer has 20 days to respond to an employee's complaint to OSHA - The employer has 30 days to object to the administrative law judge's findings and request a hearing - The employer has 60 days to appeal the board's decision to the U.S. Court o
interference with employment or livelihood of the informant
Sarbanes-Oxley Act
voting trust

3. The employee is required to do what relative to protected whistleblowers?

4. Examples of complaints found not to be covered under SOX
Creates employee whistleblower protections: Employees who complain of - or provide information about - actions they believe to be shareholder fraud are protected from discrimination and retaliation. The law also obligates covered companies to create
duty of obedience
Employees who complain of violations of state law - or those who complain of violations of internal company policies or procedures (unless the violation could also mislead shareholders)
The employee engaged in protected activity - The person accused of retaliation knew of the activity - The employee suffered an adverse employment action - The circumstances create an inference that the adverse employment action was due to the employe

5. Voucher
The employer has 20 days to respond to an employee's complaint to OSHA - The employer has 30 days to object to the administrative law judge's findings and request a hearing - The employer has 60 days to appeal the board's decision to the U.S. Court o
public companies
Creates employee whistleblower protections: Employees who complain of - or provide information about - actions they believe to be shareholder fraud are protected from discrimination and retaliation. The law also obligates covered companies to create
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

6. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
The requirement that public companies create procedures for anonymous employee complaints is enforced by the SEC. The SEC has issued rules requiring the national securities exchanges and associations to delist the stock of companies that fail to comp
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supramajority voting requirement
Creates employee whistleblower protections: Employees who complain of - or provide information about - actions they believe to be shareholder fraud are protected from discrimination and retaliation. The law also obligates covered companies to create

7. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
A control for cash recevied throught the mail
buy-and-sell agreement
If the company or person named can show by clear and convincing evidence that it would have taken the same action against the employee even in the absence of the employees protected activity
15

8. SOX (or SARBOX)
review
Receiving - keeping - and handling complaints the company receives regarding its accounting - auditing - or internal accounting controls Allowing employees to submit confidential - anonymous complaints and concerns about questionable accounting or
Sarbanes-Oxley
violation of a director's or officer's duty of loyalty. if proven - corporation can (1) acquire opportunity from director/officer and (2) recover any profits made by the director/officer

9. Under what conditions may an employee claim protection of SOX?
The SEC regulations do not require companies to follow particular procedures for taking employee complaints (such as setting up an ethics hotline or a Web-based complaint system)
If they provide information to be provided to - or assists in an investigation conducted by: A federal regulatory or law enforcement agency (such as the SEC) - A member of committee of Congress - A person who either has supervisory authority over the
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
negligence

10. SOX creates __ for company representatives.
Cash Register
personal liability
voting trust
Applies only to companies whose stock is traded on public exchanges. Its purpose is to restore public confidence and trust in the financial statements of companies.

11. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
The employer has 20 days to respond to an employee's complaint to OSHA - The employer has 30 days to object to the administrative law judge's findings and request a hearing - The employer has 60 days to appeal the board's decision to the U.S. Court o
Creates employee whistleblower protections: Employees who complain of - or provide information about - actions they believe to be shareholder fraud are protected from discrimination and retaliation. The law also obligates covered companies to create
stock dividend
business judgment rule

12. Establishes establishes far reaching rules regarding coporate governance; CEO and CFO certification; reimbursement of bonuses and incentive pay; prohibition on personal loans; tampering with evidence; bar from acting as an officer/director
fiduciary duties
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The person or company must present it's evidence within 20 days after it receives the complaint
Sarbanes-Oxley Act

13. Bank accounts
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
cumulative voting
Allows a business to reconcile the cash transactions recorded
terms - conditions

14. If OSHA does not issue a final decision on the employee's complaint within 180 days after the complaint is filed - the employee can do what?
The employee can file a lawsuit in federal district court
straight voting
preemptive rights
stock dividend

15. Special-purpose cash funds
quorum
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
record date
stock dividend

16. To be protected by sox an employee must do one of what activities?
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
quorum
Cash balance according to bank statement - Add deposit not recorded by bank (outstanding deposit) - Deduct outstanding checks (+/- Errors) - Adjusted Balance - Cash balance according to company - Add note and interest collected by bank - Deduct servi
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

17. Internal Complaint Procedures
An employee who wishes to bring a lawsuit claiming that he or she was discriminated or retaliated against in violation of SOX's whistleblower protections must first file a complaint with the Occupational Safety and Health Administration (OSHA) within
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
The requirement that public companies create procedures for anonymous employee complaints is enforced by the SEC. The SEC has issued rules requiring the national securities exchanges and associations to delist the stock of companies that fail to comp
retaliates against a whistleblower

18. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
A control for cash recevied throught the mail
retaliates against a whistleblower
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
Managers and supervisors who violate SOX by retaliating against whistle blowers may be held personally liable and have to pay judgment awarded to the employee

19. Company representative
Any officer - contractor - subcontractor - agent - or employee of a company
cumulative voting
Receiving - keeping - and handling complaints the company receives regarding its accounting - auditing - or internal accounting controls Allowing employees to submit confidential - anonymous complaints and concerns about questionable accounting or
Cash balance according to bank statement - Add deposit not recorded by bank (outstanding deposit) - Deduct outstanding checks (+/- Errors) - Adjusted Balance - Cash balance according to company - Add note and interest collected by bank - Deduct servi

20. Example of whistle blowing activities that DOL has found to be covered under SOX.
Any officer - contractor - subcontractor - agent - or employee of a company
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
E.g. The Management of General Electric Company is responsible for establishing and maintaining adequate internal control over financial reporting for this company With particaipation of the CEO and the CFO.

21. Meetings of a shareholders that may be called to consider and vote on important or emergency issues - such as a proposed merger or amending the articles of incorporation

22. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
If the company or person named can show by clear and convincing evidence that it would have taken the same action against the employee even in the absence of the employees protected activity
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Analysis of the items and amounts that cause the cash balance reported in the bank statement to differ from the balance of the cash account in the ledger in order to determine the adjusted cash balance.
15

23. SOX deadlines

24. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
Any officer - contractor - subcontractor - agent - or employee of a company
termination - demotion - suspension - threats - harassment
The SEC regulations do not require companies to follow particular procedures for taking employee complaints (such as setting up an ethics hotline or a Web-based complaint system)
officer

25. What procedures must the audit committee of a public company establish?
An employee who wishes to bring a lawsuit claiming that he or she was discriminated or retaliated against in violation of SOX's whistleblower protections must first file a complaint with the Occupational Safety and Health Administration (OSHA) within
15
duty of care
Receiving - keeping - and handling complaints the company receives regarding its accounting - auditing - or internal accounting controls Allowing employees to submit confidential - anonymous complaints and concerns about questionable accounting or

26. A written document that a shareholder signs - authorizing another person to vote his or her shares at the shareholders' meetings in the event of the shareholder's absence
administrative law judge - decision - order
The SEC regulations do not require companies to follow particular procedures for taking employee complaints (such as setting up an ethics hotline or a Web-based complaint system)
proxy
straight voting

27. Types of proceedings protected under SOX?
annual shareholders' meeting
Investigations - Legal proceedings
If the company or person named can show by clear and convincing evidence that it would have taken the same action against the employee even in the absence of the employees protected activity
Reinstate the worker to the same position - with the same benefits - responsibilities - and seniority - that the worker would have had absent the retaliation - Pay worker all the compensation and benefits lost as a result of the retaliation with inte

28. What are the conditions under which OSHA will investigate individual complaints?
The requirement that public companies create procedures for anonymous employee complaints is enforced by the SEC. The SEC has issued rules requiring the national securities exchanges and associations to delist the stock of companies that fail to comp
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
The employer has 20 days to respond to an employee's complaint to OSHA - The employer has 30 days to object to the administrative law judge's findings and request a hearing - The employer has 60 days to appeal the board's decision to the U.S. Court o
The employee engaged in protected activity - The person accused of retaliation knew of the activity - The employee suffered an adverse employment action - The circumstances create an inference that the adverse employment action was due to the employe

29. What is the stated purpose of SOX?
To protect investors by improving the accuracy and reliability of corporate disclosures - and much of the law seeks to further this goal by imposing strict rules for audits and auditors of publicly traded companies - preventing insider trading and de
Anyone who intentionally harms someone else for providing truthful information to a law enforcement officer relating to the commission of any federal offense faces up to ten years in prison
interference with employment or livelihood of the informant
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

30. The required number of share that must be represented in person or by proxy to hold a shareholders' meeting - the RMBCA establishes a majority of outstanding share as this term
buy-and-sell agreement
quorum
The requirement that public companies create procedures for anonymous employee complaints is enforced by the SEC. The SEC has issued rules requiring the national securities exchanges and associations to delist the stock of companies that fail to comp
The employee engaged in protected activity - The person accused of retaliation knew of the activity - The employee suffered an adverse employment action - The circumstances create an inference that the adverse employment action was due to the employe

31. The criminal provision of SOX
petition - Administrative Review Board - 10
preemptive rights
Managers and supervisors who violate SOX by retaliating against whistle blowers may be held personally liable and have to pay judgment awarded to the employee
Anyone who intentionally harms someone else for providing truthful information to a law enforcement officer relating to the commission of any federal offense faces up to ten years in prison

32. What is required to qualify as a protected whistleblower
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The employee must also serve this notice on the other parties to the dispute (the employer and any other companies or individuals whom the employee accuses of retaliation)
The employee engaged in protected activity - The person accused of retaliation knew of the activity - The employee suffered an adverse employment action - The circumstances create an inference that the adverse employment action was due to the employe
They can have their stocks delisted by the national securities exchange and associations

33. Sox important Organizations that you must know
Sarbanes-Oxley Act
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
violation of a director's or officer's duty of loyalty. if proven - corporation can (1) acquire opportunity from director/officer and (2) recover any profits made by the director/officer
annual shareholders' meeting

34. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
dividend
record date
30
termination - demotion - suspension - threats - harassment

35. The company or person must present evidence within __ days after receiving notice of the complaint.
20
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
To protect investors by improving the accuracy and reliability of corporate disclosures - and much of the law seeks to further this goal by imposing strict rules for audits and auditors of publicly traded companies - preventing insider trading and de
officer

36. An agreement between two or more shareholders that stipulates how they will vote their shares
termination - demotion - suspension - threats - harassment
piercing the corporate veil
dividend
shareholder voting agreement

37. Who signs Report for internal contro?
Allows a business to reconcile the cash transactions recorded
E.g. The Management of General Electric Company is responsible for establishing and maintaining adequate internal control over financial reporting for this company With particaipation of the CEO and the CFO.
The employee engaged in protected activity - The person accused of retaliation knew of the activity - The employee suffered an adverse employment action - The circumstances create an inference that the adverse employment action was due to the employe
piercing the corporate veil

38. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
preemptive rights
A committee of members of the board of directors of a public company - formed to oversee the company's audits and accounting and financial reporting processes. Has a number of legal obligations under SOX. If a public company does not establish a sepa
terms - conditions
Reinstate the worker to the same position - with the same benefits - responsibilities - and seniority - that the worker would have had absent the retaliation - Pay worker all the compensation and benefits lost as a result of the retaliation with inte

39. Elements of Internal Control
To protect investors by improving the accuracy and reliability of corporate disclosures - and much of the law seeks to further this goal by imposing strict rules for audits and auditors of publicly traded companies - preventing insider trading and de
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
quorum
quorum

40. What provision is enforced by the SEC only?

41. An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement
If they provide information to be provided to - or assists in an investigation conducted by: A federal regulatory or law enforcement agency (such as the SEC) - A member of committee of Congress - A person who either has supervisory authority over the
E.g. The Management of General Electric Company is responsible for establishing and maintaining adequate internal control over financial reporting for this company With particaipation of the CEO and the CFO.
buy-and-sell agreement
Investigations - Legal proceedings

42. A panel of decision makers who are elected by the shareholders
board of directors
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
cumulative voting

43. Objectives of Internal Control
duty of obedience
fiduciary duties
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
annual shareholders' meeting

44. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
piercing the corporate veil
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
fiduciary duties
proxy

45. Either party may request a review of the judge's decision by filing a __ with the __ within __ days after the date on the judge's order
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
petition - Administrative Review Board - 10
To protect investors by improving the accuracy and reliability of corporate disclosures - and much of the law seeks to further this goal by imposing strict rules for audits and auditors of publicly traded companies - preventing insider trading and de
inside director

46. A duty that directors and officers of a corporation have to act within the authority conferred upon them by state corporation codes - the articles of incorporation - the corporate bylaws - and the resolutions adopted by the board of directors
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
There is no avenue for employee complains regarding a public company's failure to adopt an appropriate system for confidential employee complaints. This provision is enforced by the SEC only.
A control for cash recevied throught the mail
duty of obedience

47. Additional shares of stock distributed as a dividend
There is no avenue for employee complains regarding a public company's failure to adopt an appropriate system for confidential employee complaints. This provision is enforced by the SEC only.
inside director
stock dividend
Reinstate the worker to the same position - with the same benefits - responsibilities - and seniority - that the worker would have had absent the retaliation - Pay worker all the compensation and benefits lost as a result of the retaliation with inte

48. If a hearing is requested - it will be held before an __ who will issue a __ and __.
board of directors
administrative law judge - decision - order
annual shareholders' meeting
piercing the corporate veil

49. Bank reconcilation steps
Cash balance according to bank statement - Add deposit not recorded by bank (outstanding deposit) - Deduct outstanding checks (+/- Errors) - Adjusted Balance - Cash balance according to company - Add note and interest collected by bank - Deduct servi
Allows a business to reconcile the cash transactions recorded
preemptive rights
violation of a director's or officer's duty of loyalty. if proven - corporation can (1) acquire opportunity from director/officer and (2) recover any profits made by the director/officer

50. The penalties that may be imposed under SOX.
Reinstate the worker to the same position - with the same benefits - responsibilities - and seniority - that the worker would have had absent the retaliation - Pay worker all the compensation and benefits lost as a result of the retaliation with inte
officer
special shareholders' meetings
20