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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. What is required to qualify as a protected whistleblower
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
proxy
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

2. 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
preemptive rights
petition - Administrative Review Board - 10
stock dividend
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)

3. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
retaliates against a whistleblower
A control for cash recevied throught the mail
30
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

4. Examples of complaints found not to be covered under SOX
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
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)
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
duty of care

5. Employees wishing to bring a lawsuit claiming they were discriminated or retaliated against in violation of SOX's whistleblower protection must first do what?

6. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
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
30
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
negligence

7. Sox important Organizations that you must know
The employee can file a lawsuit in federal district court
administrative law judge - decision - order
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

8. 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
negligence
piercing the corporate veil
cumulative voting
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)

9. Internal Complaint Procedures
all employees who work for public companies as long as they qualify as a whistleblower
voting trust
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
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

10. Company representative
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 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
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

11. Voucher System
annual report
interference with employment or livelihood of the informant
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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)

12. Sarbanes-Oxley Act of 2002
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
public companies
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.
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

13. A distribution of profits of the corporation to shareholders
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
Sarbanes-Oxley
dividend
outside director

14. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
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.
The person or company must present it's evidence within 20 days after it receives the complaint
preemptive rights
business judgment rule

15. 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
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
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
quorum
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

16. A member of the board of directors who is also an officer of the corporation
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
inside director
Investigations - Legal proceedings
15

17. To be protected by sox an employee must do one of what activities?
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
public companies
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

18. What provision is enforced by the SEC only?

19. Elements of Internal Control
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
A control for cash recevied throught the mail
outside director

20. The employee must also service the notice on whom?
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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.
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)

21. Under what conditions may an employee claim protection of 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
all employees who work for public companies as long as they qualify as a whistleblower
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

22. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
derivative lawsuit
Sarbanes-Oxley Act
voting trust
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.

23. A member of a board of directors who is not an officer of the corporation
30
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
outside director
piercing the corporate veil

24. The Board can either adopt the judge's decision as its own or __ the case itself
review
shareholder voting agreement
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

25. 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
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
duty of obedience
inside director
special shareholders' meetings

26. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
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.
fiduciary duties
interference with employment or livelihood of the informant
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

27. Remittance Advice
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.
board of directors
A control for cash recevied throught the mail
all employees who work for public companies as long as they qualify as a whistleblower

28. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
15
outside director

29. What employees are protected under 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
terms - conditions
duty of care

30. Special-purpose cash funds
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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.
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

31. What new employee right was created by SOX?
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
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
15

32. What are the conditions under which OSHA will investigate individual complaints?
interference with employment or livelihood of the informant
voting trust
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 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. SOC record keeping requirements
board of directors
quorum
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
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.

34. Bank statement
Allows a business to reconcile the cash transactions recorded
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
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.

35. The penalties that may be imposed 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)
special shareholders' meetings
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
record date

36. 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
piercing the corporate veil
personal liability
right of first refusal
all employees who work for public companies as long as they qualify as a whistleblower

37. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
record date
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
personal liability
terms - conditions

38. An agreement between two or more shareholders that stipulates how they will vote their shares
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
shareholder voting agreement
termination - demotion - suspension - threats - harassment
duty of obedience

39. A meeting of the shareholders of a corporation that must be held by the corporation to elect directors and to vote on other matters

40. What is one of the most important controls to protect cash received in over-the-counter sales?
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Cash Register
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Sarbanes-Oxley

41. Additional shares of stock distributed as a dividend
record date
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.
stock dividend
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

42. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
termination - demotion - suspension - threats - harassment
duty of care
record date
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.

43. Types of proceedings protected under SOX?
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
15
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
Investigations - Legal proceedings

44. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
public companies
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
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)
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

45. 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
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
terms - conditions
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
straight voting

46. A panel of decision makers who are elected by the shareholders
board of directors
60
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Any officer - contractor - subcontractor - agent - or employee of a company

47. The SEC regulations to not require companies to follow what?
business judgment rule
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 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)
interference with employment or livelihood of the informant

48. Objectives of Internal Control
administrative law judge - decision - order
terms - conditions
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
quorum

49. Why did Congress pass SOX?
personal liability
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Any officer - contractor - subcontractor - agent - or employee of a company

50. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
60
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
inside director