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. A member of a board of directors who is not an officer of the corporation
The employee can file a lawsuit in federal district court
duty of care
outside director
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.


2. Remittance Advice
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
duty of care
terms - conditions


3. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
retaliates against a whistleblower
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.
They are not protected


4. Public company
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


5. What is one of the most important controls to protect cash received in over-the-counter sales?
Cash Register
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
Allows a business to reconcile the cash transactions recorded
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct


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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


7. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
Investigations - Legal proceedings
Allows a business to reconcile the cash transactions recorded
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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


8. Personal liability provision
quorum
duty of care
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


9. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
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
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
termination - demotion - suspension - threats - harassment
supramajority voting requirement


10. The Board can either adopt the judge's decision as its own or __ the case itself
review
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
dividend
outside director


11. Sox important Organizations that you must know
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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)
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


12. To be protected by sox an employee must do one of what activities?
cumulative voting
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
board of directors
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


13. A distribution of profits of the corporation to shareholders
dividend
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.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
terms - conditions


14. 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
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
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
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.


15. Bank reconcilation
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
stock dividend
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 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


16. 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
proxy
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
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
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


17. 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)
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
60
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


18. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
business judgment rule
quorum
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


19. What is the stated purpose of SOX?
termination - demotion - suspension - threats - harassment
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
15
preemptive rights


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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


21. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
duty of loyalty
retaliates against a whistleblower
public companies
negligence


22. 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 person or company must present it's evidence within 20 days after it receives the complaint
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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


23. The company or person must present evidence within __ days after receiving notice of the complaint.
inside director
Investigations - Legal proceedings
A control for cash recevied throught the mail
20


24. Examples of complaints found not to be covered under SOX
stock dividend
interference with employment or livelihood of the informant
officer
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)


25. 4 elements that must be proven to show usurping of corporate opportunity:

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


26. A panel of decision makers who are elected by the shareholders
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
30
board of directors
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


27. An agreement between two or more shareholders that stipulates how they will vote their shares
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
buy-and-sell agreement
shareholder voting agreement
They can have their stocks delisted by the national securities exchange and associations


28. What is required to qualify as a protected whistleblower
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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 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
cumulative voting


29. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
retaliates against a whistleblower
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)


30. 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
inside director
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
right of first refusal
15


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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


32. 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
derivative lawsuit
duty of obedience
annual shareholders' meeting


33. Additional shares of stock distributed as a dividend
interference with employment or livelihood of the informant
30
stock dividend
straight voting


34. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
record date
outside director
interference with employment or livelihood of the informant
A control for cash recevied throught the mail


35. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
termination - demotion - suspension - threats - harassment
A control for cash recevied throught the mail
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
voting trust


36. 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
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
quorum
retaliates against a whistleblower


37. SOX (or SARBOX)
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Sarbanes-Oxley


38. Elements of Internal Control
officer
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)
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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


39. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
Allows a business to reconcile the cash transactions recorded
derivative lawsuit
duty of care
Sarbanes-Oxley Act


40. 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
personal liability
The person or company must present it's evidence within 20 days after it receives the complaint
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
duty of loyalty


41. Bank statement
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
piercing the corporate veil
Allows a business to reconcile the cash transactions recorded
fiduciary duties


42. 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
derivative lawsuit
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
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


43. SOX deadlines

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


44. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
officer
voting trust
duty of care


45. 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
supramajority voting requirement
quorum
60


46. Example of whistle blowing activities that DOL has found to be covered under SOX.
duty of obedience
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
annual shareholders' meeting
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud


47. Usurping of corporate opportunity

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


48. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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)
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
negligence


49. Special-purpose cash funds
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
quorum


50. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
stock dividend
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
supramajority voting requirement
duty of obedience