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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. What new employee right was created by SOX?
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
Any officer - contractor - subcontractor - agent - or employee of a company
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
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

2. The criminal provision of SOX
quorum
20
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
60

3. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
annual report
They can have their stocks delisted by the national securities exchange and associations
60
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

4. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
duty of care
record date
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

5. If a hearing is requested - it will be held before an __ who will issue a __ and __.
The person or company must present it's evidence within 20 days after it receives the complaint
terms - conditions
administrative law judge - decision - order
all employees who work for public companies as long as they qualify as a whistleblower

6. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
terms - conditions
30
Investigations - Legal proceedings
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

7. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
board of directors
voting trust
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
supramajority voting requirement

8. 4 elements that must be proven to show usurping of corporate opportunity:

9. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
shareholder voting agreement
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
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
preemptive rights

10. A member of a board of directors who is not an officer of the corporation
outside director
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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

11. Usurping of corporate opportunity

12. 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
dividend
annual report
15

13. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
Sarbanes-Oxley Act
public companies
duty of loyalty
duty of care

14. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
duty of obedience
duty of loyalty
Allows a business to reconcile the cash transactions recorded
derivative lawsuit

15. Sox important Organizations that you must know
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
dividend
board of directors

16. What is required to qualify as a protected whistleblower
terms - conditions
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
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

17. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
piercing the corporate veil
officer
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

18. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
Sarbanes-Oxley Act
terms - conditions
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
voting trust

19. 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
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
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.
administrative law judge - decision - order

20. Public company
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
petition - Administrative Review Board - 10
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

21. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
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
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.
annual report
The person or company must present it's evidence within 20 days after it receives the complaint

22. Remittance Advice
cumulative voting
A control for cash recevied throught the mail
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Sarbanes-Oxley Act

23. The employee must also service the notice on whom?
fiduciary duties
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
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)
voting trust

24. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
cumulative voting
termination - demotion - suspension - threats - harassment
supramajority voting requirement

25. Personal liability provision
preemptive rights
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
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
straight voting

26. SOX (or SARBOX)
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Sarbanes-Oxley
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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

27. Company representative
special shareholders' meetings
all employees who work for public companies as long as they qualify as a whistleblower
Any officer - contractor - subcontractor - agent - or employee of a company
15

28. 'The employee's claim of shareholder fraud does not have to be correct.'
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Sarbanes-Oxley Act
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

29. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
Any officer - contractor - subcontractor - agent - or employee of a company
fiduciary duties
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
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

30. Who signs Report for internal contro?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding 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.
duty of care
supramajority voting requirement

31. What are the conditions under which OSHA will investigate individual complaints?
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 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 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

32. 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
right of first refusal
retaliates against a whistleblower
quorum
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

33. What is the stated purpose of SOX?
piercing the corporate veil
administrative law judge - decision - order
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
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

34. The penalties that may be imposed under SOX.
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
duty of obedience
termination - demotion - suspension - threats - harassment
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

35. To be protected by sox an employee must do one of what activities?
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
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
retaliates against a whistleblower
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

36. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
officer
15
A control for cash recevied throught the mail
Sarbanes-Oxley Act

37. The SEC regulations to not require companies to follow what?
termination - demotion - suspension - threats - harassment
quorum
buy-and-sell agreement
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)

38. How does this Act define 'harm'?
The employee can file a lawsuit in federal district court
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
interference with employment or livelihood of the informant
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

39. Audit committee

40. Additional shares of stock distributed as a dividend
terms - conditions
stock dividend
annual shareholders' meeting
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

41. Objectives of Internal Control
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)
15
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

42. 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
60
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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

43. The Board can either adopt the judge's decision as its own or __ the case itself
review
termination - demotion - suspension - threats - harassment
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Sarbanes-Oxley Act

44. 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?
The employee can file a lawsuit in federal district court
review
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
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

45. What employees are protected under SOX?
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.
30
all employees who work for public companies as long as they qualify as a whistleblower
preemptive rights

46. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
board of directors
duty of care
review
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

47. SOC record keeping requirements
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
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
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
straight voting

48. 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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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
board of directors

49. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
outside director
Allows a business to reconcile the cash transactions recorded
negligence

50. Bank reconcilation steps
voting trust
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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.