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

2. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
voting trust
public companies
record date

3. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
30
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
shareholder voting agreement

4. If a hearing is requested - it will be held before an __ who will issue a __ and __.
negligence
dividend
administrative law judge - decision - order
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

5. Additional shares of stock distributed as a dividend
outside director
proxy
all employees who work for public companies as long as they qualify as a whistleblower
stock dividend

6. What is one of the most important controls to protect cash received in over-the-counter sales?
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
Cash Register
proxy
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

7. What procedures must the audit committee of a public company establish?
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
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
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

8. 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
proxy
petition - Administrative Review Board - 10
piercing the corporate veil
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.

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

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10. 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?
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
The employee can file a lawsuit in federal district court
straight voting
all employees who work for public companies as long as they qualify as a whistleblower

11. 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
public companies
supramajority voting requirement
inside director

12. 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
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
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

13. 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
straight voting
outside director
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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)

14. A panel of decision makers who are elected by the 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
personal liability
board of directors
business judgment rule

15. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
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
public companies
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
fiduciary duties

16. Internal Complaint Procedures
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
Sarbanes-Oxley
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)
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

17. 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
They are not protected
The person or company must present it's evidence within 20 days after it receives the complaint
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

18. Bank statement
officer
quorum
all employees who work for public companies as long as they qualify as a whistleblower
Allows a business to reconcile the cash transactions recorded

19. Types of proceedings protected under SOX?
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
Cash Register
Investigations - Legal proceedings
Sarbanes-Oxley

20. Voucher
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)
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
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 document that serves as proof of authority to pay cash or issue an electronic funds transfer.

21. A distribution of profits of the corporation to 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)
derivative lawsuit
duty of care
dividend

22. 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
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
right of first refusal
board of directors
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

23. 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
duty of obedience
Sarbanes-Oxley Act
special shareholders' meetings
A control for cash recevied throught the mail

24. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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)
They are not protected

25. The Board can either adopt the judge's decision as its own or __ the case itself
They are not protected
preemptive rights
review
annual report

26. 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
shareholder voting agreement
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
The person or company must present it's evidence within 20 days after it receives the complaint

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
They are not protected
proxy
negligence
inside director

28. 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
piercing the corporate veil
personal liability
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

29. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
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
voting trust
Any officer - contractor - subcontractor - agent - or employee of a company

30. The penalties that may be imposed under SOX.
board of directors
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
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.

31. Personal liability provision
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.
officer
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
derivative lawsuit

32. Bank reconcilation steps
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
buy-and-sell agreement
inside director
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

33. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
60
duty of care
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.
They are not protected

34. 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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
quorum
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
annual report

35. Sarbanes-Oxley Act of 2002
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
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.
The employee can file a lawsuit in federal district court

36. 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
preemptive rights
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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
terms - conditions

37. Audit committee

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38. 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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
administrative law judge - decision - order
cumulative voting
duty of care

39. Objectives of Internal Control
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
petition - Administrative Review Board - 10
all employees who work for public companies as long as they qualify as a whistleblower

40. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
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)
termination - demotion - suspension - threats - harassment
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.
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

41. The number of directors necessary to hold a board meeting or transact business of the board
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
fiduciary duties
annual report
quorum

42. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
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)
duty of obedience
derivative lawsuit
voting trust

43. 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.
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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.
quorum

44. 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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45. 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
They can have their stocks delisted by the national securities exchange and associations
interference with employment or livelihood of the informant
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)

46. An agreement between two or more shareholders that stipulates how they will vote their shares
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
all employees who work for public companies as long as they qualify as a whistleblower
retaliates against a whistleblower
shareholder voting agreement

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

48. Examples of complaints found not to be covered under SOX
all employees who work for public companies as long as they qualify as a whistleblower
duty of obedience
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 document that serves as proof of authority to pay cash or issue an electronic funds transfer.

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

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50. '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
board of directors
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
administrative law judge - decision - order