Test your basic knowledge |

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. SOX deadlines

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

2. Bank accounts
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
outside director
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders

3. What procedures must the audit committee of a public company establish?
quorum
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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
right of first refusal

4. Bank reconcilation
review
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.
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
Cash Register

5. An agreement between two or more shareholders that stipulates how they will vote their shares
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.
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.
shareholder voting agreement
annual shareholders' meeting

6. 'The employee's claim of shareholder fraud does not have to be correct.'
60
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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.
stock dividend

7. Company representative
retaliates against a whistleblower
quorum
Any officer - contractor - subcontractor - agent - or employee of a company
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

8. A member of a board of directors who is not an officer of the corporation
buy-and-sell agreement
duty of loyalty
outside director
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

9. 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

10. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
The employee can file a lawsuit in federal district court
Cash Register
fiduciary duties
They are not protected

11. Types of proceedings protected under SOX?
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
20
Investigations - Legal proceedings

12. To be protected by sox an employee must do one of what activities?
personal liability
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Sarbanes-Oxley Act
Allows a business to reconcile the cash transactions recorded

13. The number of directors necessary to hold a board meeting or transact business of the board
quorum
cumulative voting
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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

14. 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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

15. 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
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
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)

16. What is the stated purpose of SOX?
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
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
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
Sarbanes-Oxley

17. Public company
They are not protected
board of directors
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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

18. 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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
They can have their stocks delisted by the national securities exchange and associations
duty of obedience
Sarbanes-Oxley Act

19. 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

20. Remittance Advice
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.
A control for cash recevied throught the mail
Sarbanes-Oxley Act
annual report

21. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
preemptive rights
business judgment rule
retaliates against a whistleblower
board of directors

22. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
15
supramajority voting requirement
duty of loyalty
preemptive rights

23. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
public companies
annual report
fiduciary duties

24. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
duty of loyalty
public companies
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
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

25. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
voting trust
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
straight voting
supramajority voting requirement

26. Bank statement
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
The employee can file a lawsuit in federal district court
Allows a business to reconcile the cash transactions recorded
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.

27. Elements of Internal Control
all employees who work for public companies as long as they qualify as a whistleblower
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
Sarbanes-Oxley

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

29. 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
Allows a business to reconcile the cash transactions recorded
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
annual shareholders' meeting
duty of loyalty

30. Objectives of Internal Control
right of first refusal
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
all employees who work for public companies as long as they qualify as a whistleblower
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

31. Under what conditions may an employee claim protection of SOX?
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.
preemptive rights
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
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.

32. 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
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
special shareholders' meetings
review
straight voting

33. The Board can either adopt the judge's decision as its own or __ the case itself
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
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.
review
petition - Administrative Review Board - 10

34. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
60

35. SOX (or SARBOX)
cumulative voting
Sarbanes-Oxley
personal liability
dividend

36. Voucher
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
30
dividend
quorum

37. What is required to qualify as a protected 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)
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 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
public companies

38. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
officer
supramajority voting requirement
terms - conditions
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.

39. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
voting trust
record date
The employee can file a lawsuit in federal district court
A control for cash recevied throught the mail

40. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
annual report
administrative law judge - decision - order
supramajority voting requirement

41. What are the conditions under which OSHA will investigate individual complaints?
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 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
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

42. 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

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

43. 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
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
supramajority voting requirement
buy-and-sell agreement
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

44. The criminal provision of SOX
A control for cash recevied throught the mail
preemptive rights
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

45. A member of the board of directors who is also an officer of the corporation
quorum
inside director
Any officer - contractor - subcontractor - agent - or employee of a company
annual shareholders' meeting

46. 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?
They can have their stocks delisted by the national securities exchange and associations
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)
The employee can file a lawsuit in federal district court
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)

47. A distribution of profits of the corporation to shareholders
dividend
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)
administrative law judge - decision - order
review

48. Bank reconcilation steps
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
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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

49. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
preemptive rights
proxy
15
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

50. The employee must also service the notice on whom?
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 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)
board of directors
Sarbanes-Oxley Act