Test your basic knowledge |

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. Audit committee

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

2. A panel of decision makers who are elected by the shareholders
outside director
derivative lawsuit
board of directors
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

3. Bank statement
30
Allows a business to reconcile the cash transactions recorded
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
inside director

4. Elements of Internal Control
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
quorum

5. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
record date
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
public companies

6. SOC record keeping requirements
The employee can file a lawsuit in federal district court
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
supramajority voting requirement

7. A system in which each shareholder votes the number of share he or she own on candidates for each of the positions open - also called noncumulative voting
quorum
terms - conditions
straight voting
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

8. A distribution of profits of the corporation to shareholders
dividend
review
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)

9. 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?
Investigations - Legal proceedings
The employee can file a lawsuit in federal district court
inside director
record date

10. Company representative
termination - demotion - suspension - threats - harassment
Any officer - contractor - subcontractor - agent - or employee of a company
duty of loyalty
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

11. An agreement between two or more shareholders that stipulates how they will vote their shares
duty of care
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
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
shareholder voting agreement

12. 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
terms - conditions
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
personal liability
right of first refusal

13. Objectives of Internal Control
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
duty of care
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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

14. 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
duty of obedience
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
public companies
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

15. Example of whistle blowing activities that DOL has found to be covered under SOX.
all employees who work for public companies as long as they qualify as a whistleblower
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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
preemptive rights

16. 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
60
Sarbanes-Oxley Act
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
fiduciary duties

17. Bank reconcilation
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.
Sarbanes-Oxley
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
duty of loyalty

18. 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
retaliates against a whistleblower
quorum
personal liability
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

19. What are the conditions under which OSHA will investigate individual complaints?
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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
20
A control for cash recevied throught the mail

20. To be protected by sox an employee must do one of what activities?
quorum
negligence
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

22. 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
proxy
terms - conditions
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

23. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
Allows a business to reconcile the cash transactions recorded
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 are not protected
shareholder voting agreement

24. Personal liability provision
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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
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
quorum

25. Sox important Organizations that you must know
personal liability
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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.

26. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
Sarbanes-Oxley Act
annual shareholders' meeting
retaliates against a whistleblower
duty of obedience

27. SOX creates __ for company representatives.
Sarbanes-Oxley Act
personal liability
A control for cash recevied throught the mail
duty of obedience

28. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
officer
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)
The person or company must present it's evidence within 20 days after it receives the complaint

29. How does this Act define 'harm'?
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)
Sarbanes-Oxley
interference with employment or livelihood of the informant
Allows a business to reconcile the cash transactions recorded

30. Sarbanes-Oxley Act of 2002
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
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.
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
Sarbanes-Oxley

31. The company or person must present evidence within __ days after receiving notice of the complaint.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
20
duty of obedience
30

32. 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
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)
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
review
duty of loyalty

33. If a hearing is requested - it will be held before an __ who will issue a __ and __.
quorum
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.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
administrative law judge - decision - order

34. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
cumulative voting
business judgment rule
Allows a business to reconcile the cash transactions recorded
supramajority voting requirement

35. 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
cumulative voting
Sarbanes-Oxley Act
buy-and-sell agreement
officer

36. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
60
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
shareholder voting agreement
Any officer - contractor - subcontractor - agent - or employee of a company

37. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

38. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
public companies
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
inside director
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

39. 'The employee's claim of shareholder fraud does not have to be correct.'
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.
straight voting
terms - conditions
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

40. What employees are protected under SOX?
15
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
all employees who work for public companies as long as they qualify as a whistleblower
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

41. The criminal provision of SOX
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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
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
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

42. SOX deadlines

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

43. What procedures must the audit committee of a public company establish?
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 document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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

44. What is one of the most important controls to protect cash received in over-the-counter sales?
administrative law judge - decision - order
Cash Register
supramajority voting requirement
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

45. SOX (or SARBOX)
Any officer - contractor - subcontractor - agent - or employee of a company
Sarbanes-Oxley
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

46. Public company
annual shareholders' meeting
preemptive rights
negligence
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

47. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
negligence
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 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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

48. A member of a board of directors who is not an officer of the corporation
voting trust
outside director
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
administrative law judge - decision - order

49. A member of the board of directors who is also an officer of the corporation
derivative lawsuit
annual report
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
inside director

50. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
negligence
preemptive rights
They can have their stocks delisted by the national securities exchange and associations
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