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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. Public company
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
retaliates against a whistleblower
straight voting
20

2. An agreement between two or more shareholders that stipulates how they will vote their shares
shareholder voting agreement
Allows a business to reconcile the cash transactions recorded
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)
cumulative voting

3. Example of whistle blowing activities that DOL has found to be covered under SOX.
The person or company must present it's evidence within 20 days after it receives the complaint
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.
proxy

4. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
supramajority voting requirement
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

5. A panel of decision makers who are elected by the shareholders
board of directors
straight voting
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
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

6. Bank accounts
Allows a business to reconcile the cash transactions recorded
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
dividend
Sarbanes-Oxley

7. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
termination - demotion - suspension - threats - harassment
60
Cash Register
quorum

8. The employee must also service the notice on whom?
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)
supramajority voting requirement
duty of loyalty
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

9. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
Sarbanes-Oxley
20
quorum
15

10. The company or person must present evidence within __ days after receiving notice of the complaint.
20
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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

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

12. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
20
stock dividend
30
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

13. 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
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 can have their stocks delisted by the national securities exchange and associations
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
duty of obedience

14. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
officer
termination - demotion - suspension - threats - harassment

15. What provision is enforced by the SEC only?

16. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
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
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
retaliates against a whistleblower
They can have their stocks delisted by the national securities exchange and associations

17. 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
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)
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.
buy-and-sell agreement

18. 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
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.
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 officer - contractor - subcontractor - agent - or employee of a company

19. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
annual report
interference with employment or livelihood of the informant
buy-and-sell agreement
duty of care

20. 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
30
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)
Investigations - Legal proceedings

21. What is required to qualify as a protected whistleblower
retaliates against a whistleblower
Allows a business to reconcile the cash transactions recorded
quorum
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

22. SOX creates __ for company representatives.
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
record date
personal liability
buy-and-sell agreement

23. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
straight voting
negligence
duty of care
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)

24. Usurping of corporate opportunity

25. SOX deadlines

26. SOC record keeping requirements
derivative lawsuit
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
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.
supramajority voting requirement

27. 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
quorum
buy-and-sell agreement
petition - Administrative Review Board - 10
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

28. 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
business judgment rule
Allows a business to reconcile the cash transactions recorded
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

29. Bank statement
duty of care
A control for cash recevied throught the mail
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
Allows a business to reconcile the cash transactions recorded

30. 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 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
piercing the corporate veil
They are not protected
right of first refusal

31. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
They can have their stocks delisted by the national securities exchange and associations
30
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
The employee can file a lawsuit in federal district court

32. A member of the board of directors who is also an officer of the corporation
inside director
They can have their stocks delisted by the national securities exchange and associations
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
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

33. What new employee right was created by SOX?
interference with employment or livelihood of the informant
Sarbanes-Oxley
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
They can have their stocks delisted by the national securities exchange and associations

34. Bank reconcilation
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
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.
Sarbanes-Oxley Act

35. A distribution of profits of the corporation to shareholders
dividend
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
retaliates against a whistleblower
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)

36. Sarbanes-Oxley Act of 2002
The person or company must present it's evidence within 20 days after it receives the complaint
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
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.
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

37. 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
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
retaliates against a whistleblower
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

38. Voucher System
terms - conditions
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
quorum
outside director

39. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
duty of obedience
voting trust
A control for cash recevied throught the mail

40. Under what conditions may an employee claim protection of SOX?
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
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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
buy-and-sell agreement

41. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
shareholder voting agreement
termination - demotion - suspension - threats - harassment
special shareholders' meetings

42. SOX states that __ - __ - __ - __ and __ all constitute 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
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.
shareholder voting agreement
termination - demotion - suspension - threats - harassment

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.
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.
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
right of first refusal

44. Personal liability provision
special shareholders' meetings
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.
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 document that serves as proof of authority to pay cash or issue an electronic funds transfer.

45. Remittance Advice
A control for cash recevied throught the mail
interference with employment or livelihood of the informant
duty of obedience
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

46. 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

47. The SEC regulations to not require companies to follow what?
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
Allows a business to reconcile the cash transactions recorded
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)
outside director

48. A member of a board of directors who is not an officer of the corporation
outside director
duty of care
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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.

49. The Board can either adopt the judge's decision as its own or __ the case itself
review
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
20

50. What is one of the most important controls to protect cash received in over-the-counter sales?
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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
Cash Register