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. 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
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
buy-and-sell agreement
petition - Administrative Review Board - 10


2. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
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
officer
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
right of first refusal


3. Remittance Advice
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
Sarbanes-Oxley Act
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.
A control for cash recevied throught the mail


4. The penalties that may be imposed under 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
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
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


5. Example of whistle blowing activities that DOL has found to be covered under SOX.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
inside director
right of first refusal


6. 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
supramajority voting requirement
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
quorum
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


7. 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
fiduciary duties
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 are not protected
right of first refusal


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


9. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
buy-and-sell agreement
The person or company must present it's evidence within 20 days after it receives the complaint
annual report
interference with employment or livelihood of the informant


10. 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
Investigations - Legal proceedings
cumulative voting
They can have their stocks delisted by the national securities exchange and associations


11. 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
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
proxy
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)


12. 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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
Sarbanes-Oxley Act
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


13. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
The employee can file a lawsuit in federal district court
20
They can have their stocks delisted by the national securities exchange and associations
stock dividend


14. A member of the board of directors who is also an officer of the corporation
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
inside director
review


15. SOX deadlines

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16. What is one of the most important controls to protect cash received in over-the-counter sales?
personal liability
60
Cash Register
quorum


17. What is the stated purpose of SOX?
duty of care
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
terms - conditions
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


18. A member of a board of directors who is not an officer of the corporation
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
outside director
personal liability
retaliates against a whistleblower


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

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20. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
stock dividend
The employee can file a lawsuit in federal district court
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
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


21. Voucher
interference with employment or livelihood of the informant
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 control for cash recevied throught the mail
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


22. Elements of Internal Control
A control for cash recevied throught the mail
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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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.


23. 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
termination - demotion - suspension - threats - harassment
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
cumulative voting
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


24. The employee must also service the notice on whom?
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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)


25. Public company
20
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)
interference with employment or livelihood of the informant
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


26. 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.
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)
duty of care
record date


27. Bank statement
annual shareholders' meeting
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
Allows a business to reconcile the cash transactions recorded
They can have their stocks delisted by the national securities exchange and associations


28. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the 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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
15
quorum


29. Under what conditions may an employee claim protection of SOX?
The person or company must present it's evidence within 20 days after it receives the complaint
special shareholders' meetings
inside director
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


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


31. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
termination - demotion - suspension - threats - harassment
negligence
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
20


32. 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
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
board of directors
petition - Administrative Review Board - 10
terms - conditions


33. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
They are not protected
Any officer - contractor - subcontractor - agent - or employee of a company


34. What provision is enforced by the SEC only?

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35. A distribution of profits of the corporation to shareholders
Cash Register
dividend
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


36. Bank reconcilation steps
60
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
right of first refusal
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


37. SOX (or SARBOX)
Sarbanes-Oxley
duty of care
Any officer - contractor - subcontractor - agent - or employee of a company
supramajority voting requirement


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. Who signs Report for internal contro?
annual report
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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.
piercing the corporate veil


40. 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
retaliates against a whistleblower
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
20


41. 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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42. Types of proceedings protected under SOX?
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
duty of care
They are not protected
Investigations - Legal proceedings


43. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
preemptive rights
30
inside director
The person or company must present it's evidence within 20 days after it receives the complaint


44. What new employee right was created by SOX?
annual shareholders' meeting
administrative law judge - decision - order
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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed


45. If a hearing is requested - it will be held before an __ who will issue a __ and __.
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)
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
administrative law judge - decision - order


46. Company representative
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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
terms - conditions
Any officer - contractor - subcontractor - agent - or employee of a company


47. 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
buy-and-sell agreement
straight voting
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


48. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
quorum
fiduciary duties
negligence
Allows a business to reconcile the cash transactions recorded


49. 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
public companies
buy-and-sell agreement
dividend
Sarbanes-Oxley


50. The number of directors necessary to hold a board meeting or transact business of the board
quorum
20
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