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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 Board can either adopt the judge's decision as its own or __ the case itself
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
review
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

2. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
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
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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.

3. A requirement that a greater than majority of shares constitutes a quorum of the vote of 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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
supramajority voting requirement

4. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
officer
Investigations - Legal proceedings
personal liability
60

5. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
quorum
terms - conditions
administrative law judge - decision - order
fiduciary duties

6. What is one of the most important controls to protect cash received in over-the-counter sales?
review
Cash Register
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
The person or company must present it's evidence within 20 days after it receives the complaint

7. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
terms - conditions
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.
annual report
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

8. A member of a board of directors who is not an officer of the corporation
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
annual shareholders' meeting
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.

9. Remittance Advice
interference with employment or livelihood of the informant
A control for cash recevied throught the mail
30
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

10. Types of proceedings protected under SOX?
termination - demotion - suspension - threats - harassment
annual report
Investigations - Legal proceedings
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

11. Company representative
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)
terms - conditions
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
Any officer - contractor - subcontractor - agent - or employee of a company

12. A panel of decision makers who are elected by the shareholders
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
record date
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
board of directors

13. 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
buy-and-sell agreement
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
derivative lawsuit
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

14. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
The person or company must present it's evidence within 20 days after it receives the complaint
voting trust
30
They are not protected

15. Why did Congress pass SOX?
quorum
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.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
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.

16. What new employee right was created by SOX?
annual report
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
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

17. Who signs Report for internal contro?
fiduciary duties
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.
Cash Register
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

18. 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
duty of loyalty
terms - conditions
retaliates against 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

19. 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
administrative law judge - decision - order
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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
Sarbanes-Oxley Act

20. Personal liability provision
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
buy-and-sell agreement
30
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

21. SOX (or SARBOX)
straight voting
outside director
voting trust
Sarbanes-Oxley

22. 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)
business judgment rule
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)
stock dividend

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

24. Audit committee

25. Bank statement
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
Allows a business to reconcile the cash transactions recorded
shareholder voting agreement
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

26. 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
officer
They can have their stocks delisted by the national securities exchange and associations
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
piercing the corporate veil

27. Sarbanes-Oxley Act of 2002
annual report
piercing the corporate veil
petition - Administrative Review Board - 10
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.

28. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
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
officer
negligence
preemptive rights

29. What provision is enforced by the SEC only?

30. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
special shareholders' meetings
15
piercing the corporate veil
record date

31. The employee must also service the notice on whom?
annual report
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)
piercing the corporate veil

32. Additional shares of stock distributed as a dividend
business judgment rule
stock dividend
The employee can file a lawsuit in federal district court
Allows a business to reconcile the cash transactions recorded

33. SOX creates __ for company representatives.
duty of care
officer
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
personal liability

34. The criminal provision of SOX
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
A control for cash recevied throught the mail
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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

35. The number of directors necessary to hold a board meeting or transact business of the board
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
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
right of first refusal
quorum

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

37. Sox important Organizations that you must know
The person or company must present it's evidence within 20 days after it receives the complaint
20
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)

38. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
public companies
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
15
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

39. Voucher
20
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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

40. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
termination - demotion - suspension - threats - harassment
They can have their stocks delisted by the national securities exchange and associations
The employee can file a lawsuit in federal district court
business judgment rule

41. The company or person must present evidence within __ days after receiving notice of the complaint.
fiduciary duties
The employee can file a lawsuit in federal district court
20
cumulative voting

42. If a hearing is requested - it will be held before an __ who will issue a __ and __.
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
administrative law judge - decision - order
Any officer - contractor - subcontractor - agent - or employee of a company
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. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
derivative lawsuit
Investigations - Legal proceedings
straight voting
20

44. Public companies and company representatives are not permitted to retaliate against an employee in the __ or __ of his/her employment because the employee provided information - participated in an investigation - or participated in a proceeding relat
terms - conditions
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
buy-and-sell agreement
petition - Administrative Review Board - 10

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
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 can file a lawsuit in federal district court
straight voting
negligence

46. 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

47. 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
review
30
record date
petition - Administrative Review Board - 10

48. Bank reconcilation
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.
stock dividend
proxy
negligence

49. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
Sarbanes-Oxley
retaliates against a whistleblower
Sarbanes-Oxley Act
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

50. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
officer
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.
proxy
They are not protected