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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. A doctrine that says if a shareholder dominates a corporation and uses it for improper purposes - a court of equity can disregard the corporate entity and hold the shareholder personally liable for the corporation's debts and obligations - also calle
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
piercing the corporate veil
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
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

2. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
voting trust
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
preemptive rights
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

3. Company representative
20
Sarbanes-Oxley
board of directors
Any officer - contractor - subcontractor - agent - or employee of a company

4. A requirement that a greater than majority of shares constitutes a quorum of the vote of the 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)
shareholder voting agreement
supramajority voting requirement
quorum

5. 4 elements that must be proven to show usurping of corporate opportunity:

6. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
business judgment rule
shareholder voting agreement
60
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

7. Audit committee

8. What provision is enforced by the SEC only?

9. What is required to qualify as a protected whistleblower
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
record date
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

10. 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
derivative lawsuit
annual shareholders' meeting
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

11. How does this Act define 'harm'?
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
inside director
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
interference with employment or livelihood of the informant

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

13. 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?
The employee can file a lawsuit in federal district court
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
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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

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
A control for cash recevied throught the mail
review
duty of obedience
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

15. 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
administrative law judge - decision - order
review
straight voting
15

16. SOC record keeping requirements
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 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
annual shareholders' meeting
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

17. A member of a board of directors who is not an officer of the corporation
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
shareholder voting agreement
Sarbanes-Oxley

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
quorum
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
duty of obedience
derivative lawsuit

19. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
They can have their stocks delisted by the national securities exchange and associations
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
officer
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. 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
Allows a business to reconcile the cash transactions recorded
fiduciary duties
Sarbanes-Oxley Act
interference with employment or livelihood of the informant

21. A panel of decision makers who are elected by the shareholders
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
board of directors
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

22. Bank reconcilation
annual report
The employee can file a lawsuit in federal district court
They are not protected
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.

23. Example of whistle blowing activities that DOL has found to be covered under SOX.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
annual shareholders' meeting
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
special shareholders' meetings

24. What is one of the most important controls to protect cash received in over-the-counter sales?
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
preemptive rights
Cash Register
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

25. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
They are not protected
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
15
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

26. Additional shares of stock distributed as a dividend
dividend
stock dividend
retaliates against a whistleblower
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

27. 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
Sarbanes-Oxley Act
60
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.

28. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
annual report
retaliates against a whistleblower
Sarbanes-Oxley Act
A control for cash recevied throught the mail

29. Internal Complaint Procedures
negligence
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

30. SOX creates __ for company representatives.
A control for cash recevied throught the mail
The employee can file a lawsuit in federal district court
supramajority voting requirement
personal liability

31. Elements of Internal Control
A control for cash recevied throught the mail
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
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

32. The Board can either adopt the judge's decision as its own or __ the case itself
review
retaliates against a whistleblower
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
fiduciary duties

33. What are the conditions under which OSHA will investigate individual complaints?
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
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
proxy
straight voting

34. To be protected by sox an employee must do one of what activities?
special shareholders' meetings
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

35. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
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
Any officer - contractor - subcontractor - agent - or employee of a company
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

36. SOX deadlines

37. What new employee right was created by SOX?
piercing the corporate veil
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
proxy
They are not protected

38. A distribution of profits of the corporation to shareholders
They can have their stocks delisted by the national securities exchange and associations
dividend
cumulative voting
record date

39. 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
fiduciary duties
duty of loyalty
Sarbanes-Oxley Act
board of directors

40. The penalties that may be imposed under SOX.
Sarbanes-Oxley
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
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.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

41. Sarbanes-Oxley Act of 2002
quorum
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.
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

42. Sox important Organizations that you must know
business judgment rule
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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

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

44. Under what conditions may an employee claim protection of SOX?
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
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
dividend
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

45. 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
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
60
annual shareholders' meeting

46. Why did Congress pass SOX?
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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
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

47. An agreement between two or more shareholders that stipulates how they will vote their shares
shareholder voting agreement
preemptive rights
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.
piercing the corporate veil

48. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
annual report
30
shareholder voting agreement
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

49. The criminal provision of SOX
officer
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
special shareholders' meetings
board of directors

50. 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
30
The employee can file a lawsuit in federal district court
petition - Administrative Review Board - 10
buy-and-sell agreement