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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. 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
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
quorum
public companies
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.

2. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
duty of care
business judgment rule
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
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)

3. The company or person must present evidence within __ days after receiving notice of the complaint.
duty of obedience
20
record date
duty of loyalty

4. 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
annual shareholders' meeting
The employee can file a lawsuit in federal district court
30
petition - Administrative Review Board - 10

5. Internal Complaint Procedures
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
The person or company must present it's evidence within 20 days after it receives the complaint
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

6. Bank statement
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
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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders

7. 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
public companies
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)
duty of obedience
They are not protected

8. 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
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

9. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
retaliates against a whistleblower
supramajority voting requirement
shareholder voting agreement
petition - Administrative Review Board - 10

10. What are the conditions under which OSHA will investigate individual complaints?
The employee can file a lawsuit in federal district court
Sarbanes-Oxley Act
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
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)

11. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
They are not protected
negligence

12. The penalties that may be imposed under SOX.
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.
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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
stock dividend

13. Sarbanes-Oxley Act of 2002
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.
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 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
inside director

14. Employees wishing to bring a lawsuit claiming they were discriminated or retaliated against in violation of SOX's whistleblower protection must first do what?

15. 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
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
20
15
buy-and-sell agreement

16. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
special shareholders' meetings
derivative lawsuit
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
interference with employment or livelihood of the informant

17. What employees are protected under SOX?
special shareholders' meetings
all employees who work for public companies as long as they qualify as a whistleblower
15
annual report

18. What is required to qualify as a protected whistleblower
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
60
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
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

19. Bank reconcilation steps
right of first refusal
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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
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. 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
Allows a business to reconcile the cash transactions recorded
straight voting
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)
cumulative voting

21. A member of a board of directors who is not an officer of the corporation
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 can file a lawsuit in federal district court
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

22. SOX (or SARBOX)
Sarbanes-Oxley
business judgment rule
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
cumulative voting

23. Company representative
interference with employment or livelihood of the informant
60
Any officer - contractor - subcontractor - agent - or employee of a company
proxy

24. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
They can have their stocks delisted by the national securities exchange and associations
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
dividend

25. Types of proceedings protected under SOX?
business judgment rule
Investigations - Legal proceedings
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

26. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
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)
personal liability
record date
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.

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

28. Additional shares of stock distributed as a dividend
stock dividend
Sarbanes-Oxley Act
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

29. 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
personal liability
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

30. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
annual report
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
fiduciary duties
preemptive rights

31. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
A control for cash recevied throught the mail
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 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

32. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
voting trust
termination - demotion - suspension - threats - harassment
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

33. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
annual report
preemptive rights
fiduciary duties
piercing the corporate veil

34. Objectives of Internal Control
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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 only needed to show that he or she had a reasonable belief that the conduct constituted fraud
piercing the corporate veil

35. How does this Act define 'harm'?
Sarbanes-Oxley Act
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
interference with employment or livelihood of the informant
right of first refusal

36. SOX deadlines

37. A distribution of profits of the corporation to shareholders
administrative law judge - decision - order
shareholder voting agreement
dividend
duty of obedience

38. 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
Investigations - Legal proceedings
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
The person or company must present it's evidence within 20 days after it receives the complaint
proxy

39. Bank accounts
The person or company must present it's evidence within 20 days after it receives the complaint
terms - conditions
stock dividend
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

40. SOX creates __ for company representatives.
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
straight voting
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)
personal liability

41. Sox important Organizations that you must know
They are not protected
duty of care
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

42. 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
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
voting trust
review

43. What provision is enforced by the SEC only?

44. 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
business judgment rule
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Any officer - contractor - subcontractor - agent - or employee of a company

45. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
record date
duty of loyalty
interference with employment or livelihood of the informant

46. Remittance Advice
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
A control for cash recevied throught the mail
preemptive rights
interference with employment or livelihood of the informant

47. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
15
administrative law judge - decision - order

48. Voucher
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)
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
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.

49. Usurping of corporate opportunity

50. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
buy-and-sell agreement
60
right of first refusal
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