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. Personal liability provision
inside director
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 officer - contractor - subcontractor - agent - or employee of a company
all employees who work for public companies as long as they qualify as a whistleblower


2. The penalties that may be imposed under SOX.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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
outside director
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


3. Remittance Advice
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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
A control for cash recevied throught the mail


4. The SEC regulations to not require companies to follow what?
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)
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 employee can file a lawsuit in federal district court
straight voting


5. How does this Act define 'harm'?
Sarbanes-Oxley Act
Sarbanes-Oxley
derivative lawsuit
interference with employment or livelihood of the informant


6. SOC record keeping requirements
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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
proxy
annual shareholders' meeting


7. 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
Sarbanes-Oxley
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
interference with employment or livelihood of the informant


8. 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
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 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)
retaliates against a whistleblower


9. Voucher
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)
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Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Any officer - contractor - subcontractor - agent - or employee of a company


10. SOX deadlines

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11. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
straight voting
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
business judgment rule
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.


12. 4 elements that must be proven to show usurping of corporate opportunity:

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13. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
Any officer - contractor - subcontractor - agent - or employee of a company
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
termination - demotion - suspension - threats - harassment
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


14. Sarbanes-Oxley Act of 2002
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.
15
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.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


15. 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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
The person or company must present it's evidence within 20 days after it receives the complaint
buy-and-sell agreement
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


16. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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
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


17. A distribution of profits of the corporation to shareholders
dividend
duty of loyalty
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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)


18. What are the conditions under which OSHA will investigate individual complaints?
personal liability
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.
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
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


19. 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
interference with employment or livelihood of the informant
Cash Register
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


20. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
annual report
Allows a business to reconcile the cash transactions recorded
They are not protected
retaliates against a whistleblower


21. SOX (or SARBOX)
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.
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.
supramajority voting requirement
Sarbanes-Oxley


22. 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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23. A member of the board of directors who is also an officer of the corporation
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
inside director
record date
derivative lawsuit


24. A panel of decision makers who are elected by the shareholders
board of directors
preemptive rights
shareholder voting agreement
record date


25. Company representative
Any officer - contractor - subcontractor - agent - or employee of a company
A control for cash recevied throught the mail
officer
The person or company must present it's evidence within 20 days after it receives the complaint


26. Public company
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
terms - conditions
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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)


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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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)
proxy
shareholder voting agreement


28. Usurping of corporate opportunity

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29. SOX creates __ for company representatives.
record date
personal liability
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)
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)


30. The company or person must present evidence within __ days after receiving notice of the complaint.
20
terms - conditions
petition - Administrative Review Board - 10
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


31. Audit committee

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32. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
personal liability
all employees who work for public companies as long as they qualify as a whistleblower
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


33. The number of directors necessary to hold a board meeting or transact business of the board
derivative lawsuit
interference with employment or livelihood of the informant
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
quorum


34. 'The employee's claim of shareholder fraud does not have to be correct.'
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
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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


35. An agreement between two or more shareholders that stipulates how they will vote their shares
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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
shareholder voting agreement
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)


36. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
15
officer
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed


37. The Board can either adopt the judge's decision as its own or __ the case itself
Sarbanes-Oxley Act
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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
review


38. A member of a board of directors who is not an officer of the corporation
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
outside director
fiduciary duties
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


39. 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)
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


40. 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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41. 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
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
right of first refusal
termination - demotion - suspension - threats - harassment


42. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
15
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.
business judgment rule
preemptive rights


43. A requirement that a greater than majority of shares constitutes a quorum of the vote of the 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
stock dividend
buy-and-sell agreement
supramajority voting requirement


44. The criminal provision of SOX
dividend
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


45. Internal Complaint Procedures
outside director
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
voting trust
Cash Register


46. 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
duty of care
supramajority voting requirement


47. Elements of Internal Control
The person or company must present it's evidence within 20 days after it receives the complaint
buy-and-sell 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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


48. What new employee right was created by SOX?
piercing the corporate veil
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
Sarbanes-Oxley
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.


49. 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
quorum
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
duty of obedience
review


50. If a hearing is requested - it will be held before an __ who will issue a __ and __.
all employees who work for public companies as long as they qualify as a whistleblower
administrative law judge - decision - order
annual report
business judgment rule