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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. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
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)
retaliates against a whistleblower
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

2. What is one of the most important controls to protect cash received in over-the-counter sales?
annual report
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
The person or company must present it's evidence within 20 days after it receives the complaint
Cash Register

3. The company or person must present evidence within __ days after receiving notice of the complaint.
duty of loyalty
20
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

4. What provision is enforced by the SEC only?

5. The Board can either adopt the judge's decision as its own or __ the case itself
voting trust
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
duty of loyalty
review

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

7. 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 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)
proxy
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
30

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

9. The number of directors necessary to hold a board meeting or transact business of the board
negligence
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
quorum
Any officer - contractor - subcontractor - agent - or employee of a company

10. Company representative
piercing the corporate veil
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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.
Any officer - contractor - subcontractor - agent - or employee of a company

11. An agreement between two or more shareholders that stipulates how they will vote their shares
They are not protected
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
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
shareholder voting agreement

12. Additional shares of stock distributed as a dividend
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
Sarbanes-Oxley Act
record date
stock dividend

13. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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
derivative lawsuit
termination - demotion - suspension - threats - harassment

14. Bank reconcilation
public companies
They are not protected
duty of care
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. Objectives of Internal Control
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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.
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
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

16. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
A control for cash recevied throught the mail
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
voting trust
public companies

17. Public company
retaliates against a whistleblower
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
The employee can file a lawsuit in federal district court
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

18. Examples of complaints found not to be covered 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)
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
duty of obedience
proxy

19. What is required to qualify as a protected whistleblower
all employees who work for public companies as long as they qualify as a whistleblower
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
supramajority voting requirement
Sarbanes-Oxley

20. Special-purpose cash funds
annual shareholders' meeting
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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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

21. SOX deadlines

22. Under what conditions may an employee claim protection of SOX?
quorum
straight voting
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
Sarbanes-Oxley

23. Personal liability provision
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
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
annual shareholders' meeting
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

24. 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
petition - Administrative Review Board - 10
stock dividend
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

25. Types of proceedings protected under SOX?
Investigations - Legal proceedings
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.
petition - Administrative Review Board - 10
quorum

26. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
record date
officer
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)

27. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
piercing the corporate veil
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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.
They can have their stocks delisted by the national securities exchange and associations

28. 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
terms - conditions
retaliates against a whistleblower
buy-and-sell agreement
15

29. Bank accounts
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
supramajority voting requirement
outside director

30. A member of the board of directors who is also an officer of the corporation
voting trust
inside director
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

31. Sox important Organizations that you must know
60
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

32. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
record date
duty of care
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)
outside director

33. 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
retaliates against a whistleblower
outside director
shareholder voting agreement
duty of loyalty

34. 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
15
special shareholders' meetings
Cash Register
quorum

35. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
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
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

36. To be protected by sox an employee must do one of what activities?
duty of loyalty
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

37. What is the stated purpose of SOX?
fiduciary duties
proxy
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
derivative lawsuit

38. 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
duty of loyalty
20
proxy
Sarbanes-Oxley Act

39. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
15
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
board of directors
public companies

40. Usurping of corporate opportunity

41. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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 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
annual report

42. A doctrine that says if a shareholder dominates a corporation and uses it for improper purposes - a court of equity can disregard the corporate entity and hold the shareholder personally liable for the corporation's debts and obligations - also calle
Allows a business to reconcile the cash transactions recorded
Cash Register
piercing the corporate veil
15

43. Bank statement
inside director
Allows a business to reconcile the cash transactions recorded
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Cash Register

44. 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)
officer
administrative law judge - decision - order
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.

45. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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 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

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

47. A distribution of profits of the corporation to shareholders
cumulative 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
annual report
dividend

48. 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
business judgment rule
duty of obedience
personal liability
Cash Register

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

50. Internal Complaint Procedures
Investigations - Legal proceedings
quorum
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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