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. 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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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
cumulative voting


2. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
administrative law judge - decision - order
stock dividend
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


3. Bank accounts
termination - demotion - suspension - threats - harassment
buy-and-sell agreement
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
inside director


4. What employees are protected under SOX?
all employees who work for public companies as long as they qualify as a whistleblower
inside director
right of first refusal
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


5. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
duty of care
preemptive rights
officer


6. A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders
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.
duty of loyalty
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
review


7. 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
duty of care
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
Any officer - contractor - subcontractor - agent - or employee of a company


8. A member of the board of directors who is also an officer of the corporation
inside director
interference with employment or livelihood of the informant
negligence
board of directors


9. Additional shares of stock distributed as a dividend
review
buy-and-sell agreement
stock dividend
record date


10. Usurping of corporate opportunity

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11. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
negligence
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Allows a business to reconcile the cash transactions recorded
quorum


12. 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
right of first refusal
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
They are not protected
inside director


13. A distribution of profits of the corporation to shareholders
dividend
Investigations - Legal proceedings
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.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


14. The company or person must present evidence within __ days after receiving notice of the complaint.
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)
20
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
annual report


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

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16. Under what conditions may an employee claim protection of SOX?
public companies
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


17. Sox important Organizations that you must know
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
They are not protected
administrative law judge - decision - order
Cash Register


18. A member of a board of directors who is not an officer of the corporation
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
proxy
outside director
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)


19. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
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
cumulative voting
administrative law judge - decision - order
derivative lawsuit


20. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
derivative lawsuit
Allows a business to reconcile the cash transactions recorded
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
30


21. 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?
annual shareholders' meeting
The employee can file a lawsuit in federal district court
stock dividend
fiduciary duties


22. 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 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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
duty of obedience
Investigations - Legal proceedings


23. Types of proceedings protected under SOX?
Investigations - Legal proceedings
straight voting
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
Sarbanes-Oxley


24. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
personal liability
voting trust
A control for cash recevied throught the mail
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


25. Personal liability provision
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
proxy
dividend
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


26. 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
60
inside director
Any officer - contractor - subcontractor - agent - or employee of a company


27. If a hearing is requested - it will be held before an __ who will issue a __ and __.
Sarbanes-Oxley
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
administrative law judge - decision - order
interference with employment or livelihood of the informant


28. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
preemptive rights
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
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
record date


29. The SEC regulations to not require companies to follow what?
They can have their stocks delisted by the national securities exchange and associations
duty of obedience
15
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)


30. A system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates
cumulative voting
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
60
annual report


31. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
They are not protected
proxy
fiduciary duties
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


32. What is required to qualify as a protected whistleblower
duty of loyalty
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
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
right of first refusal


33. An agreement between two or more shareholders that stipulates how they will vote their shares
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
quorum
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
shareholder voting agreement


34. Bank statement
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Allows a business to reconcile the cash transactions recorded
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


35. Company representative
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
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.
voting trust
Any officer - contractor - subcontractor - agent - or employee of a company


36. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
retaliates against a whistleblower
petition - Administrative Review Board - 10
annual shareholders' meeting
voting trust


37. Voucher
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
They are not protected
dividend


38. 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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39. Public company
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
board of directors
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
The employee can file a lawsuit in federal district court


40. 'The employee's claim of shareholder fraud does not have to be correct.'
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
They can have their stocks delisted by the national securities exchange and associations
inside director
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.


41. 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
Investigations - Legal proceedings
shareholder voting agreement


42. Remittance Advice
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
A control for cash recevied throught the mail
buy-and-sell agreement
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.


43. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
public companies
proxy
outside director


44. What new employee right was created by SOX?
annual shareholders' meeting
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 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


45. Objectives of Internal Control
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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.
quorum
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations


46. Audit committee

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47. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
annual report
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
cumulative voting
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.


48. What provision is enforced by the SEC only?

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49. Special-purpose cash funds
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
right of first refusal
interference with employment or livelihood of the informant


50. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
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
quorum
officer
petition - Administrative Review Board - 10