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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. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
record date
30
officer
quorum

2. Types of proceedings protected under SOX?
board of directors
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
annual report
Investigations - Legal proceedings

3. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
annual report
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)

4. Voucher
business judgment rule
terms - conditions
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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

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

6. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
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
They can have their stocks delisted by the national securities exchange and associations
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
derivative lawsuit

7. What procedures must the audit committee of a public company establish?
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
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
stock dividend
business judgment rule

8. Bank statement
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
15
Allows a business to reconcile the cash transactions recorded

9. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
negligence
preemptive rights
Any officer - contractor - subcontractor - agent - or employee of a company
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

10. 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
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
quorum
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

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

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

13. What is required to qualify as a protected whistleblower
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
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
board of directors

14. A member of a board of directors who is not an officer of the corporation
business judgment rule
A control for cash recevied throught the mail
Sarbanes-Oxley Act
outside director

15. Company representative
Any officer - contractor - subcontractor - agent - or employee of a company
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)
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
interference with employment or livelihood of the informant

16. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
20
duty of care
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

17. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
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
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
dividend
retaliates against a whistleblower

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

19. 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
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
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

20. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
stock dividend
record date
terms - conditions

21. 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?
derivative lawsuit
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
They can have their stocks delisted by the national securities exchange and associations

22. To be protected by sox an employee must do one of what activities?
board of directors
termination - demotion - suspension - threats - harassment
buy-and-sell agreement
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

23. The number of directors necessary to hold a board meeting or transact business of the board
stock dividend
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
quorum
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)

24. Sarbanes-Oxley Act of 2002
straight voting
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
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.
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.

25. 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
60
duty of obedience
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
Cash Register

26. The penalties that may be imposed under SOX.
preemptive rights
annual shareholders' meeting
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

27. 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
outside director
They can have their stocks delisted by the national securities exchange and associations
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

28. Bank reconcilation steps
They can have their stocks delisted by the national securities exchange and associations
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
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.
derivative lawsuit

29. 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

30. 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
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
petition - Administrative Review Board - 10
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

31. Usurping of corporate opportunity

32. Example of whistle blowing activities that DOL has found to be covered under 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
Sarbanes-Oxley Act
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

33. Special-purpose cash funds
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
proxy
A control for cash recevied throught the mail
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

34. SOX deadlines

35. Additional shares of stock distributed as a dividend
stock dividend
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
Any officer - contractor - subcontractor - agent - or employee of a company
termination - demotion - suspension - threats - harassment

36. Why did Congress pass SOX?
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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
15
60

37. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
petition - Administrative Review Board - 10
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
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
public companies

38. Remittance Advice
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 control for cash recevied throught the mail
annual report
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)

39. Bank reconcilation
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
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.
duty of obedience
15

40. The criminal provision of SOX
buy-and-sell agreement
straight voting
supramajority voting requirement
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

41. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
administrative law judge - decision - order
fiduciary duties
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.
derivative lawsuit

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

43. Audit committee

44. 'The employee's claim of shareholder fraud does not have to be correct.'
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
administrative law judge - decision - order
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

45. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
personal liability
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.
business judgment rule
Investigations - Legal proceedings

46. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
petition - Administrative Review Board - 10
supramajority voting requirement
Allows a business to reconcile the cash transactions recorded
60

47. Objectives of Internal Control
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
business judgment rule

48. Internal Complaint Procedures
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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
record date
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

49. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
quorum
buy-and-sell agreement
special shareholders' meetings
15

50. 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
straight voting
annual report
60
terms - conditions