Sarbanes Oxley Act: SOX Corporate Governance

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. Audit committee

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2. A member of the board of directors who is also an officer of the corporation
cumulative voting
inside director
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)
shareholder voting agreement


3. Voucher System
record date
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.
Any officer - contractor - subcontractor - agent - or employee of a company


4. Types of proceedings protected under SOX?
right of first refusal
Investigations - Legal proceedings
buy-and-sell agreement
preemptive rights


5. 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

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6. Remittance Advice
voting trust
A control for cash recevied throught the mail
termination - demotion - suspension - threats - harassment
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations


7. How does this Act define 'harm'?
all employees who work for public companies as long as they qualify as a whistleblower
proxy
interference with employment or livelihood of the informant
Sarbanes-Oxley


8. A meeting of the shareholders of a corporation that must be held by the corporation to elect directors and to vote on other matters

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9. 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
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
proxy
opportunity was presented to the director/officer in his or her corporate capacity - opportunity is related to or connected with teh corporation's current or propsed business - corporation has the financial ability to take advantage of the opportunit
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


10. The SEC regulations to not require companies to follow what?
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
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 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)


11. Why did Congress pass SOX?
retaliates against a whistleblower
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
voting trust
annual report


12. The criminal provision of SOX
buy-and-sell agreement
30
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
Any officer - contractor - subcontractor - agent - or employee of a company


13. SOC record keeping requirements
The financial safeguards imposed by SOX include numerous reporting requirements - but there are no reporting requirements associated solely with its whistleblower provisions - The National securities exchanges and commissions may require public compa
officer
They can have their stocks delisted by the national securities exchange and associations
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations


14. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
officer
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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


15. A distribution of profits of the corporation to shareholders
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
all employees who work for public companies as long as they qualify as a whistleblower
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
dividend


16. An agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else
public companies
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
duty of care
right of first refusal


17. What are the conditions under which OSHA will investigate individual complaints?
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
derivative lawsuit
The financial safeguards imposed by SOX include numerous reporting requirements - but there are no reporting requirements associated solely with its whistleblower provisions - The National securities exchanges and commissions may require public compa
Sarbanes-Oxley Act


18. Elements of Internal Control
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
proxy
duty of care
shareholder voting agreement


19. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
15
business judgment rule
60
terms - conditions


20. Usurping of corporate opportunity

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21. Personal liability provision
termination - demotion - suspension - threats - harassment
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
supramajority voting requirement
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


22. Examples of complaints found not to be covered under SOX
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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)
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


23. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
public companies
inside director
retaliates against a whistleblower
personal liability


24. Special-purpose cash funds
administrative law judge - decision - order
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
The person or company must present it's evidence within 20 days after it receives the complaint
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.


25. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
record date
petition - Administrative Review Board - 10
terms - conditions
business judgment rule


26. Voucher
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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.
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
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


27. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
annual shareholders' meeting
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
duty of care


28. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
retaliates against a whistleblower
record date
duty of obedience
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


29. SOX deadlines

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30. Bank statement
business judgment rule
Allows a business to reconcile the cash transactions recorded
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
stock dividend


31. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
They are not protected
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
Cash Register
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG


32. What new employee right was created by SOX?
outside director
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
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
stock dividend


33. 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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
record date
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


34. 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
buy-and-sell agreement
duty of loyalty
voting trust
negligence


35. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
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.
20
preemptive rights
quorum


36. Public company
public companies
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
duty of loyalty
annual report


37. 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
Sarbanes-Oxley
review
petition - Administrative Review Board - 10
dividend


38. 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?
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
personal liability
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
The employee can file a lawsuit in federal district court


39. Who signs Report for internal contro?
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
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.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
They are not protected


40. The Board can either adopt the judge's decision as its own or __ the case itself
derivative lawsuit
annual report
review
Investigations - Legal proceedings


41. Under what conditions may an employee claim protection of SOX?
They can have their stocks delisted by the national securities exchange and associations
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
A control for cash recevied throught the mail
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


42. Additional shares of stock distributed as a dividend
stock dividend
dividend
duty of obedience
preemptive rights


43. SOX creates __ for company representatives.
shareholder voting agreement
personal liability
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
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


44. 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
Cash Register
shareholder voting agreement
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
duty of obedience


45. The employee must also service the notice on whom?
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)
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Sarbanes-Oxley Act


46. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
proxy
supramajority voting requirement
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.
officer


47. A member of a board of directors who is not an officer of the corporation
personal liability
They can have their stocks delisted by the national securities exchange and associations
opportunity was presented to the director/officer in his or her corporate capacity - opportunity is related to or connected with teh corporation's current or propsed business - corporation has the financial ability to take advantage of the opportunit
outside director


48. What provision is enforced by the SEC only?

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49. The number of directors necessary to hold a board meeting or transact business of the board
outside director
business judgment rule
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.
quorum


50. 4 elements that must be proven to show usurping of corporate opportunity:

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