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Sarbanes Oxley Act: SOX Corporate Governance

Subjects : certifications, sarbanes-oxley

Instructions:

Answer 50 questions in 15 minutes.
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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. Internal Complaint Procedures
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
special shareholders' meetings
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
They can have their stocks delisted by the national securities exchange and associations

2. Examples of complaints found not to be covered under SOX
business judgment rule
petition - Administrative Review Board - 10
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)
proxy

3. The penalties that may be imposed under SOX.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
quorum
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

4. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
supramajority voting requirement
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
inside director
retaliates against a whistleblower

5. Personal liability provision
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
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
fiduciary duties
Investigations - Legal proceedings

6. What is the stated purpose 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)
Sarbanes-Oxley Act
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
annual shareholders' meeting

7. Company representative
Sarbanes-Oxley Act
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
cumulative voting
Any officer - contractor - subcontractor - agent - or employee of a company

8. Audit committee

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9. Remittance Advice
A control for cash recevied throught the mail
straight voting
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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

10. Sox important Organizations that you must know
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.
proxy
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

11. Public company
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
Investigations - Legal proceedings
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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.

12. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
record date
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)
fiduciary duties
dividend

13. The company or person must present evidence within __ days after receiving notice of the complaint.
20
terms - conditions
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
review

14. What is one of the most important controls to protect cash received in over-the-counter sales?
Cash Register
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
record date

15. What procedures must the audit committee of a public company establish?
proxy
outside director
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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

16. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
record date
quorum
public companies
Allows a business to reconcile the cash transactions recorded

17. SOC record keeping requirements
inside director
60
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
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

18. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
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
They can have their stocks delisted by the national securities exchange and associations
60

19. SOX deadlines

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20. Bank statement
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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
15
Allows a business to reconcile the cash transactions recorded

21. 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
preemptive rights
60
buy-and-sell agreement
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

22. Why did Congress pass SOX?
supramajority voting requirement
duty of loyalty
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
termination - demotion - suspension - threats - harassment

23. The Board can either adopt the judge's decision as its own or __ the case itself
review
fiduciary duties
annual report
termination - demotion - suspension - threats - harassment

24. 4 elements that must be proven to show usurping of corporate opportunity:

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25. 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
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
duty of obedience

26. SOX creates __ for company representatives.
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
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.
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
personal liability

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

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28. What employees are protected under SOX?
petition - Administrative Review Board - 10
all employees who work for public companies as long as they qualify as a whistleblower
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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

29. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
business judgment rule
duty of care
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.
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

30. The criminal provision of SOX
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
Sarbanes-Oxley Act
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

31. A panel of decision makers who are elected by the shareholders
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.
board of directors
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
review

32. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
duty of obedience
officer
20
review

33. A distribution of profits of the corporation to shareholders
dividend
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
officer
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

34. Additional shares of stock distributed as a dividend
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
stock dividend
quorum
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)

35. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
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
annual shareholders' meeting
inside director
cumulative voting

36. Elements of Internal Control
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
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.
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

37. Bank reconcilation
review
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
Any officer - contractor - subcontractor - agent - or employee of a company
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.

38. SOX (or SARBOX)
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.
annual shareholders' meeting
Sarbanes-Oxley
60

39. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
annual report
terms - conditions
duty of care
petition - Administrative Review Board - 10

40. Bank reconcilation steps
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
They can have their stocks delisted by the national securities exchange and associations
Sarbanes-Oxley
Cash Register

41. What new employee right was created by SOX?
piercing the corporate veil
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 person or company must present it's evidence within 20 days after it receives the complaint
review

42. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
preemptive rights
20
business judgment rule

43. An agreement between two or more shareholders that stipulates how they will vote their shares
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
board of directors
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)
shareholder voting agreement

44. Who signs Report for internal contro?
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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.
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)

45. 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
Any officer - contractor - subcontractor - agent - or employee of a company
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
business judgment rule

46. The number of directors necessary to hold a board meeting or transact business of the board
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
quorum
all employees who work for public companies as long as they qualify as a whistleblower
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.

47. Voucher
Any officer - contractor - subcontractor - agent - or employee of a company
review
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

48. 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
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
They can have their stocks delisted by the national securities exchange and associations
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Sarbanes-Oxley Act

49. To be protected by sox an employee must do one of what activities?
30
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
inside director
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)

50. If a hearing is requested - it will be held before an __ who will issue a __ and __.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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
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
administrative law judge - decision - order

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Sarbanes Oxley Act: SOX Corporate Governance

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