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. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
public companies
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


2. A member of the board of directors who is also an officer of the corporation
inside director
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders


3. Company representative
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
Any officer - contractor - subcontractor - agent - or employee of a company
They are not protected
shareholder voting agreement


4. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
30
derivative lawsuit
supramajority voting requirement
officer


5. 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
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
retaliates against a whistleblower
Sarbanes-Oxley Act
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


6. Voucher
public companies
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.


7. Remittance Advice
review
petition - Administrative Review Board - 10
outside director
A control for cash recevied throught the mail


8. 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
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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


9. What is required to qualify as a protected whistleblower
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 only needed to show that he or she had a reasonable belief that the conduct constituted fraud
quorum
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.


10. 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


11. 'The employee's claim of shareholder fraud does not have to be correct.'
stock dividend
review
Any officer - contractor - subcontractor - agent - or employee of a company
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


12. SOX (or SARBOX)
The person or company must present it's evidence within 20 days after it receives the complaint
duty of care
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Sarbanes-Oxley


13. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
termination - demotion - suspension - threats - harassment
Cash Register
negligence
The person or company must present it's evidence within 20 days after it receives the complaint


14. The number of directors necessary to hold a board meeting or transact business of the board
quorum
terms - conditions
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.
record date


15. 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
They are not protected
duty of obedience
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


16. A panel of decision makers who are elected by the shareholders
board of directors
cumulative voting
terms - conditions
right of first refusal


17. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
15
voting trust
termination - demotion - suspension - threats - harassment
cumulative voting


18. The company or person must present evidence within __ days after receiving notice of the complaint.
duty of obedience
quorum
termination - demotion - suspension - threats - harassment
20


19. 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


20. 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


21. 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
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)
piercing the corporate veil
annual report
dividend


22. 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
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
board of directors
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)


23. 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
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.
Any officer - contractor - subcontractor - agent - or employee of a company
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
petition - Administrative Review Board - 10


24. The Board can either adopt the judge's decision as its own or __ the case itself
review
duty of loyalty
Sarbanes-Oxley
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


25. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
piercing the corporate veil
60
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


26. Examples of complaints found not to be covered under SOX
duty of care
The employee can file a lawsuit in federal district court
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


27. 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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
proxy
Sarbanes-Oxley
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


28. Bank reconcilation steps
They are not protected
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
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)
piercing the corporate veil


29. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
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)
They are not protected
straight voting
duty of care


30. If a hearing is requested - it will be held before an __ who will issue a __ and __.
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 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
They can have their stocks delisted by the national securities exchange and associations
administrative law judge - decision - order


31. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
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)
They are not protected
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


32. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
15
stock dividend
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
preemptive rights


33. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
right of first refusal
special shareholders' meetings
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
supramajority voting requirement


34. Audit committee

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


35. 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
A control for cash recevied throught the mail
right of first refusal
terms - conditions
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


36. The criminal provision of SOX
review
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.
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.
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


37. How does this Act define 'harm'?
interference with employment or livelihood of the informant
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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
review


38. Bank accounts
business judgment rule
officer
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
termination - demotion - suspension - threats - harassment


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

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


40. Types of proceedings protected under SOX?
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)
outside director
right of first refusal
Investigations - Legal proceedings


41. 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


42. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
business judgment rule
interference with employment or livelihood of the informant
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
preemptive rights


43. Internal Complaint Procedures
Allows a business to reconcile the cash transactions recorded
duty of obedience
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
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)


44. Sarbanes-Oxley Act of 2002
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.
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.
inside director
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


45. 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.
straight voting
derivative lawsuit
15


46. Voucher System
petition - Administrative Review Board - 10
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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 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


47. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
fiduciary duties
60
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


48. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
all employees who work for public companies as long as they qualify as a whistleblower
They can have their stocks delisted by the national securities exchange and associations
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


49. What employees are protected under SOX?
annual shareholders' meeting
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.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


50. The SEC regulations to not require companies to follow what?
Sarbanes-Oxley Act
buy-and-sell agreement
outside 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)