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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. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
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
They can have their stocks delisted by the national securities exchange and associations
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
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2. 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
They are not protected
right of first refusal
duty of loyalty
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

3. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
review
board of directors
supramajority voting requirement
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)

4. 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
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
terms - conditions
dividend
inside director

5. 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
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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
straight voting
duty of obedience

6. Bank statement
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.
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)
business judgment rule
Allows a business to reconcile the cash transactions recorded

7. An agreement between two or more shareholders that stipulates how they will vote their shares
Sarbanes-Oxley
shareholder voting agreement
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.
They are not protected

8. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
board of directors
business judgment rule
negligence
administrative law judge - decision - order

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

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10. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
stock dividend
duty of loyalty
They are not protected
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

11. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
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 employee can file a lawsuit in federal district court
They are not protected
annual report

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

13. 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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14. What is required to qualify as a protected whistleblower
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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
straight voting
interference with employment or livelihood of the informant

15. Additional shares of stock distributed as a dividend
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
stock dividend
cumulative voting

16. The penalties that may be imposed under SOX.
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
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)
duty of obedience

17. 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
right of first refusal
annual shareholders' meeting
piercing the corporate veil
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

18. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
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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)
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
right of first refusal

19. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
public companies
duty of obedience
retaliates against a whistleblower

20. SOX (or SARBOX)
Sarbanes-Oxley
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
review
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

21. Company representative
record date
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Any officer - contractor - subcontractor - agent - or employee of a company
shareholder voting agreement

22. Public company
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
quorum
Sarbanes-Oxley

23. 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
voting trust
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
business judgment rule

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

25. What employees are protected under SOX?
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
administrative law judge - decision - order
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)

26. Elements of Internal Control
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
duty of loyalty
fiduciary duties
inside director

27. Examples of complaints found not to be covered under SOX
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
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)
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)
negligence

28. Who signs Report for internal contro?
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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
They can have their stocks delisted by the national securities exchange and associations
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.

29. The Board can either adopt the judge's decision as its own or __ the case itself
all employees who work for public companies as long as they qualify as a whistleblower
personal liability
review
They are not protected

30. 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
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
inside director
Any officer - contractor - subcontractor - agent - or employee of a company

31. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
proxy
derivative lawsuit
Investigations - Legal proceedings
The person or company must present it's evidence within 20 days after it receives the complaint

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

33. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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
straight voting
business judgment rule

34. 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

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35. The employee must also service the notice on whom?
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 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)
administrative law judge - decision - order
annual shareholders' meeting

36. Bank reconcilation
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.
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.
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The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

37. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
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.
piercing the corporate veil
15

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
proxy
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
The employee can file a lawsuit in federal district court
voting trust
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.
annual shareholders' meeting

40. What provision is enforced by the SEC only?

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41. What is one of the most important controls to protect cash received in over-the-counter sales?
right of first refusal
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.
Cash Register
retaliates against a whistleblower

42. SOX creates __ for company representatives.
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)
20
personal liability
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. Types of proceedings protected under SOX?
Sarbanes-Oxley
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
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.

44. Why did Congress pass SOX?
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
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.
shareholder voting agreement
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders

45. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
public companies
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
Sarbanes-Oxley

46. A distribution of profits of the corporation to shareholders
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
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
A control for cash recevied throught the mail

47. 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
60
stock dividend
personal liability
cumulative voting

48. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
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
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

49. 'The employee's claim of shareholder fraud does not have to be correct.'
stock dividend
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
proxy
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

50. 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?
Any officer - contractor - subcontractor - agent - or employee of a company
petition - Administrative Review Board - 10
The employee can file a lawsuit in federal district court
A control for cash recevied throught the mail