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. Types of proceedings protected under SOX?
buy-and-sell agreement
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
straight voting
Investigations - Legal proceedings


2. 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
interference with employment or livelihood of the informant
Cash Register
quorum
all employees who work for public companies as long as they qualify as a whistleblower


3. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
business judgment rule
Sarbanes-Oxley Act
outside director
15


4. Sox important Organizations that you must know
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
cumulative voting
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Any officer - contractor - subcontractor - agent - or employee of a company


5. The penalties that may be imposed under SOX.
interference with employment or livelihood of the informant
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 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
board of directors


6. Usurping of corporate opportunity

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7. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
60
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
straight voting
annual report


8. Personal liability provision
voting trust
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
They are not protected
special shareholders' meetings


9. 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
Sarbanes-Oxley Act
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
The employee can file a lawsuit in federal district court


10. The Board can either adopt the judge's decision as its own or __ the case itself
The person or company must present it's evidence within 20 days after it receives the complaint
shareholder voting agreement
negligence
review


11. The company or person must present evidence within __ days after receiving notice of the complaint.
voting trust
officer
20
retaliates against a whistleblower


12. Elements of Internal Control
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
They can have their stocks delisted by the national securities exchange and associations
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.


13. Special-purpose cash funds
Sarbanes-Oxley Act
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
duty of loyalty


14. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
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)
voting trust
duty of care
stock dividend


15. What provision is enforced by the SEC only?

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16. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
preemptive rights
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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
administrative law judge - decision - order


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

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18. 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
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)
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


19. What new employee right was created by SOX?
20
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
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
derivative lawsuit


20. Sarbanes-Oxley Act of 2002
retaliates against a whistleblower
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.
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
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


21. What are the conditions under which OSHA will investigate individual complaints?
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
stock dividend
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


22. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
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
fiduciary duties
quorum


23. 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
duty of loyalty
petition - Administrative Review Board - 10
supramajority voting requirement
fiduciary duties


24. 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)
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
15
They can have their stocks delisted by the national securities exchange and associations


25. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
30
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
termination - demotion - suspension - threats - harassment
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct


26. SOX creates __ for company representatives.
interference with employment or livelihood of the informant
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
personal liability
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


27. 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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Cash Register
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


28. '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
quorum
The employee can file a lawsuit in federal district court
supramajority voting requirement


29. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
30
inside director
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
duty of loyalty


30. SOX (or SARBOX)
Sarbanes-Oxley
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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


31. SOX deadlines

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32. Internal Complaint Procedures
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
preemptive rights
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
business judgment rule


33. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
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.
negligence
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
review


34. Who signs Report for internal contro?
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.
negligence
Allows a business to reconcile the cash transactions recorded
administrative law judge - decision - order


35. Additional shares of stock distributed as a dividend
stock dividend
voting trust
60
interference with employment or livelihood of the informant


36. 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.
dividend
Sarbanes-Oxley
The employee can file a lawsuit in federal district court


37. Under what conditions may an employee claim protection of SOX?
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)
60
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 employee can file a lawsuit in federal district court


38. How does this Act define 'harm'?
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
interference with employment or livelihood of the informant
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
proxy


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


40. 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
supramajority voting requirement
petition - Administrative Review Board - 10
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
annual report


41. A panel of decision makers who are elected by the shareholders
quorum
board of directors
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


42. 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
Sarbanes-Oxley
shareholder voting agreement
petition - Administrative Review Board - 10
straight voting


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


44. To be protected by sox an employee must do one of what activities?
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
supramajority voting requirement


45. 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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46. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
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
They can have their stocks delisted by the national securities exchange and associations
piercing the corporate veil
fiduciary duties


47. Objectives of Internal Control
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)
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
special shareholders' meetings
duty of loyalty


48. 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
review
60
piercing the corporate veil
all employees who work for public companies as long as they qualify as a whistleblower


49. What employees are protected under SOX?
Any officer - contractor - subcontractor - agent - or employee of a 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
all employees who work for public companies as long as they qualify as a whistleblower
straight voting


50. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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.
Any officer - contractor - subcontractor - agent - or employee of a company