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Sarbanes Oxley Act: SOX Corporate Governance

Subjects : certifications, sarbanes-oxley

Instructions:

Answer 50 questions in 15 minutes.
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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. 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 Act
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
petition - Administrative Review Board - 10
Sarbanes-Oxley

2. 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
15
annual report
straight voting

3. What new employee right was created by SOX?
terms - conditions
fiduciary duties
board of directors
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

4. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
60
duty of care
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
all employees who work for public companies as long as they qualify as a whistleblower

5. The criminal provision of SOX
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
petition - Administrative Review Board - 10
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
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

6. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
record date
annual report
60
terms - conditions

7. The SEC regulations to not require companies to follow what?
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
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
Sarbanes-Oxley
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)

8. What is one of the most important controls to protect cash received in over-the-counter sales?
Cash Register
termination - demotion - suspension - threats - harassment
administrative law judge - decision - order
record date

9. Internal Complaint Procedures
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 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
proxy
right of first refusal

10. 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
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
Sarbanes-Oxley
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

11. SOX (or SARBOX)
Sarbanes-Oxley Act
right of first refusal
Sarbanes-Oxley
special shareholders' meetings

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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
piercing the corporate veil
terms - conditions
all employees who work for public companies as long as they qualify as a whistleblower

13. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
15
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

14. The employee must also service the notice on whom?
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
administrative law judge - decision - order
Sarbanes-Oxley Act
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)

15. A member of the board of directors who is also an officer of the corporation
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
buy-and-sell agreement
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)
inside director

16. A panel of decision makers who are elected by the shareholders
review
board of directors
personal liability
negligence

17. 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
voting trust
right of first refusal
annual report
administrative law judge - decision - order

18. 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?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
administrative law judge - decision - order
The employee can file a lawsuit in federal district court
A control for cash recevied throught the mail

19. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
stock dividend
all employees who work for public companies as long as they qualify as a whistleblower

20. Under what conditions may an employee claim protection of SOX?
personal liability
20
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
retaliates against a whistleblower

21. What are the conditions under which OSHA will investigate individual complaints?
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.
petition - Administrative Review Board - 10
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
Allows a business to reconcile the cash transactions recorded

22. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
Sarbanes-Oxley Act
The employee can file a lawsuit in federal district court
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

23. What is required to qualify as a protected whistleblower
review
Investigations - Legal proceedings
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
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

24. Elements of Internal Control
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
duty of obedience
public companies

25. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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
retaliates against a whistleblower
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

26. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
negligence
all employees who work for public companies as long as they qualify as a whistleblower

27. SOX deadlines

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28. A member of a board of directors who is not an officer of the corporation
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
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
outside director

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

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30. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
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 officer - contractor - subcontractor - agent - or employee of a company
fiduciary duties
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

31. 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
duty of care
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
duty of loyalty
quorum

32. Why did Congress pass SOX?
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In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
inside director
duty of care

33. What provision is enforced by the SEC only?

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34. The penalties that may be imposed under SOX.
A control for cash recevied throught the mail
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
preemptive rights
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

35. An agreement between two or more shareholders that stipulates how they will vote their shares
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
fiduciary duties
annual report
shareholder voting agreement

36. 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.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
outside director

37. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
administrative law judge - decision - order
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
They are not protected

38. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
business judgment rule
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.
record date
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

39. The Board can either adopt the judge's decision as its own or __ the case itself
Sarbanes-Oxley
officer
review
buy-and-sell agreement

40. 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 loyalty
duty of obedience
negligence
Any officer - contractor - subcontractor - agent - or employee of a company

41. Additional shares of stock distributed as a dividend
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
quorum
stock dividend
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. 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
Allows a business to reconcile the cash transactions recorded
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
cumulative voting
quorum

43. 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
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.
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)
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

44. 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
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)
personal liability
Investigations - Legal proceedings

45. 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
Sarbanes-Oxley Act
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.
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
all employees who work for public companies as long as they qualify as a whistleblower

46. 4 elements that must be proven to show usurping of corporate opportunity:

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47. Bank statement
Allows a business to reconcile the cash transactions recorded
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
duty of loyalty
all employees who work for public companies as long as they qualify as a whistleblower

48. Example of whistle blowing activities that DOL has found to be covered under SOX.
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
special shareholders' meetings
30
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

49. 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
quorum
public companies

50. A distribution of profits of the corporation to shareholders
inside director
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.
dividend
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