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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. Elements of Internal Control
special shareholders' meetings
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
officer
dividend

2. Personal liability provision
supramajority voting requirement
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
negligence
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

3. Who signs Report for internal contro?
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.
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 only needed to show that he or she had a reasonable belief that the conduct constituted fraud

4. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
derivative lawsuit
inside director
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)
A control for cash recevied throught the mail

5. If a hearing is requested - it will be held before an __ who will issue a __ and __.
petition - Administrative Review Board - 10
fiduciary duties
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
administrative law judge - decision - order

6. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
duty of care
negligence
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
record date

7. A distribution of profits of the corporation to shareholders
Cash Register
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
quorum
dividend

8. A panel of decision makers who are elected by the shareholders
The employee can file a lawsuit in federal district court
shareholder voting agreement
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)
board of directors

9. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
board of directors
They can have their stocks delisted by the national securities exchange and associations
business judgment rule
quorum

10. 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
voting trust
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

11. What are the conditions under which OSHA will investigate individual complaints?
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
business judgment rule
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
review

12. 4 elements that must be proven to show usurping of corporate opportunity:

13. 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.
stock dividend
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)
They can have their stocks delisted by the national securities exchange and associations

14. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
termination - demotion - suspension - threats - harassment
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 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
annual report

15. 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
The employee can file a lawsuit in federal district court
quorum
Allows a business to reconcile the cash transactions recorded
preemptive rights

16. 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
proxy
buy-and-sell 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
stock dividend

17. Examples of complaints found not to be covered under SOX
voting trust
duty of care
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)
public companies

18. The employee must also service the notice on whom?
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)
right of first refusal
officer
duty of care

19. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
public companies
administrative law judge - decision - order
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 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. Bank accounts
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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

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

22. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
preemptive rights
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
business judgment rule
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

23. 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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
quorum
special shareholders' meetings
piercing the corporate veil

24. What is one of the most important controls to protect cash received in over-the-counter sales?
annual report
duty of obedience
Cash Register
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

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

26. Either party may object to these findings and request a hearing within __ days after receiving the finding and 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)
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)
30
petition - Administrative Review Board - 10

27. The company or person must present evidence within __ days after receiving notice of the complaint.
administrative law judge - decision - order
The employee can file a lawsuit in federal district court
Any officer - contractor - subcontractor - agent - or employee of a company
20

28. 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
petition - Administrative Review Board - 10
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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

29. Under what conditions may an employee claim protection of SOX?
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
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
termination - demotion - suspension - threats - harassment
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)

30. 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
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
30
cumulative voting

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

32. 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
duty of loyalty
retaliates against a whistleblower
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.

33. Public company
Sarbanes-Oxley
They can have their stocks delisted by the national securities exchange and associations
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
dividend

34. 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
voting trust
They can have their stocks delisted by the national securities exchange and associations
duty of obedience
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

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

36. 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
officer
duty of loyalty
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
petition - Administrative Review Board - 10

37. 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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
petition - Administrative Review Board - 10
Any officer - contractor - subcontractor - agent - or employee of a company
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

38. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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
supramajority voting requirement
15

39. An agreement between two or more shareholders that stipulates how they will vote their shares
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
shareholder voting agreement
Sarbanes-Oxley

40. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
60
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.
duty of care

41. What is required to qualify as a protected whistleblower
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
retaliates against a whistleblower
review
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

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
cumulative voting
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

43. Types of proceedings protected under SOX?
petition - Administrative Review Board - 10
The employee can file a lawsuit in federal district court
Investigations - Legal proceedings
duty of loyalty

44. 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?
record date
annual report
The employee can file a lawsuit in federal district court
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)
fiduciary duties
Sarbanes-Oxley
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
quorum

46. SOX creates __ for company representatives.
public companies
personal liability
fiduciary duties
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)

47. The SEC regulations to not require companies to follow what?
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 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 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
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

48. The criminal provision of SOX
supramajority voting requirement
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Allows a business to reconcile the cash transactions recorded
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

49. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
supramajority voting requirement
stock 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
annual report

50. 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
straight voting
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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
outside director