Sarbanes Oxley Act: SOX Corporate Governance

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. What employees are protected under SOX?
30
15
all employees who work for public companies as long as they qualify as a whistleblower
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


2. The SEC regulations to not require companies to follow what?
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Cash Register
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)


3. Bank reconcilation steps
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
duty of loyalty
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG


4. A member of the board of directors who is also an officer of the corporation
inside director
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
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)
20


5. 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
personal liability
quorum
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


6. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
derivative lawsuit
special shareholders' meetings


7. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
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
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
voting trust
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


8. Under what conditions may an employee claim protection of SOX?
inside director
administrative law judge - decision - order
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
fiduciary duties


9. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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
officer


10. 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 obedience
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
preemptive rights
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. Additional shares of stock distributed as a dividend
Allows a business to reconcile the cash transactions recorded
inside director
stock dividend
dividend


12. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
termination - demotion - suspension - threats - harassment
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
quorum
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


13. Who signs Report for internal contro?
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 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
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.
Sarbanes-Oxley


14. Remittance Advice
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.
fiduciary duties
A control for cash recevied throught the mail
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


15. 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
petition - Administrative Review Board - 10
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.
proxy
Cash Register


16. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its 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)
fiduciary duties
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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


17. Personal liability provision
The person or company must present it's evidence within 20 days after it receives the complaint
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
quorum
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


18. Elements of Internal Control
officer
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
proxy


19. Company representative
annual report
inside director
piercing the corporate veil
Any officer - contractor - subcontractor - agent - or employee of a company


20. 'The employee's claim of shareholder fraud does not have to be correct.'
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
terms - conditions
duty of loyalty


21. SOX creates __ for company representatives.
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
personal liability
fiduciary duties
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


22. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
Allows a business to reconcile the cash transactions recorded
review
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
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


23. 4 elements that must be proven to show usurping of corporate opportunity:

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


25. 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
right of first refusal
Sarbanes-Oxley
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
Cash Register


26. The criminal provision of SOX
business judgment rule
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 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 person or company must present it's evidence within 20 days after it receives the complaint


27. Bank statement
termination - demotion - suspension - threats - harassment
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
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
Allows a business to reconcile the cash transactions recorded


28. Bank accounts
The employee can file a lawsuit in federal district court
derivative lawsuit
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
right of first refusal


29. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
public 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
personal liability


30. SOX deadlines

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


31. What is the stated purpose of SOX?
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
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
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.
petition - Administrative Review Board - 10


32. The penalties that may be imposed under SOX.
duty of loyalty
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
terms - conditions


33. Public company
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
20
personal liability
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


34. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
shareholder voting 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
derivative lawsuit
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


35. What is required to qualify as a protected whistleblower
petition - Administrative Review Board - 10
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.
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


36. What provision is enforced by the SEC only?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


37. A distribution of profits of the corporation to shareholders
dividend
Any officer - contractor - subcontractor - agent - or employee of a company
record date
buy-and-sell agreement


38. Examples of complaints found not to be covered under SOX
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)
15
duty of care
officer


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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


40. 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
The person or company must present it's evidence within 20 days after it receives the complaint
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
proxy
petition - Administrative Review Board - 10


41. Sarbanes-Oxley Act of 2002
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
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.
duty of loyalty


42. Special-purpose cash funds
board of directors
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
piercing the corporate veil
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed


43. The number of directors necessary to hold a board meeting or transact business of the board
Allows a business to reconcile the cash transactions recorded
officer
quorum
duty of obedience


44. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


45. What new employee right was created by SOX?
supramajority voting requirement
A control for cash recevied throught the mail
The employee can file a lawsuit in federal district court
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


46. SOX (or SARBOX)
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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.
20
Sarbanes-Oxley


47. What are the conditions under which OSHA will investigate individual complaints?
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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
shareholder voting agreement
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


48. To be protected by sox an employee must do one of what activities?
15
review
The employee can file a lawsuit in federal district court
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct


49. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
They can have their stocks delisted by the national securities exchange and associations
board of directors
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
preemptive rights


50. An agreement between two or more shareholders that stipulates how they will vote their shares
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.
60
shareholder voting agreement
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