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


2. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
terms - conditions
business judgment rule
buy-and-sell agreement
derivative lawsuit


3. SOX deadlines

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4. What new employee right was created by SOX?
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
all employees who work for public companies as long as they qualify as a whistleblower
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
special shareholders' meetings


5. 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
special shareholders' meetings
petition - Administrative Review Board - 10
voting trust
public companies


6. 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
petition - Administrative Review Board - 10
Investigations - Legal proceedings
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


7. 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
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
review


8. 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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9. The number of directors necessary to hold a board meeting or transact business of the board
personal liability
special shareholders' meetings
quorum
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct


10. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
fiduciary duties
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.
quorum


11. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
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.
right of first refusal
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


12. Audit committee

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13. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
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
shareholder voting agreement
preemptive rights
supramajority voting requirement


14. 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.
administrative law judge - decision - order
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
outside director


15. Who signs Report for internal contro?
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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.
annual report
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


16. How does this Act define 'harm'?
piercing the corporate veil
business judgment rule
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


17. 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
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
duty of obedience
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


18. What is required to qualify as a protected whistleblower
public companies
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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 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)


19. 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
special shareholders' meetings
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
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


20. Sarbanes-Oxley Act of 2002
outside director
all employees who work for public companies as long as they qualify as 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.
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


21. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
20
shareholder voting agreement
voting trust
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct


22. SOX (or SARBOX)
personal liability
outside director
Sarbanes-Oxley
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


23. What provision is enforced by the SEC only?

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24. What employees are protected under SOX?
all employees who work for public companies as long as they qualify as a whistleblower
record date
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


25. Usurping of corporate opportunity

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26. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
preemptive rights
business judgment rule


27. 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)
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
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.


28. Public company
supramajority voting requirement
annual report
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


29. What are the conditions under which OSHA will investigate individual complaints?
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
business judgment rule
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


30. 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
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)
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
termination - demotion - suspension - threats - harassment


31. 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)
stock dividend
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
inside director


32. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct


33. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
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
record date
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
negligence


34. 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
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
straight voting
proxy
termination - demotion - suspension - threats - harassment


35. 4 elements that must be proven to show usurping of corporate opportunity:

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36. 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
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.
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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


37. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
15
60
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


38. 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

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


40. 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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
retaliates against a whistleblower
derivative lawsuit


41. SOC record keeping requirements
Investigations - Legal proceedings
cumulative voting
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


42. 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
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)
business judgment rule
retaliates against a whistleblower


43. A distribution of profits of the corporation to 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.
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
dividend
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


44. 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
buy-and-sell agreement
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)
business judgment rule
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations


45. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Allows a business to reconcile the cash transactions recorded
30
A control for cash recevied throught the mail


46. 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
quorum
review
special shareholders' meetings
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


47. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
30
quorum
record date
fiduciary duties


48. What is the stated purpose of SOX?
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
buy-and-sell agreement
public companies


49. Bank accounts
preemptive rights
supramajority voting requirement
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


50. An agreement between two or more shareholders that stipulates how they will vote their shares
negligence
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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud