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Sarbanes Oxley Act: SOX Corporate Governance

Subjects : certifications, sarbanes-oxley

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Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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1. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
supramajority voting requirement
15
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
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

2. 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
business judgment rule
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
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

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

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4. 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?
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
The employee can file a lawsuit in federal district court
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.
dividend

5. What is the stated purpose of 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
petition - Administrative Review Board - 10
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

6. 4 elements that must be proven to show usurping of corporate opportunity:

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7. The SEC regulations to not require companies to follow what?
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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)
shareholder voting agreement
board of directors

8. Example of whistle blowing activities that DOL has found to be covered under SOX.
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 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)
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)
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

9. What procedures must the audit committee of a public company establish?
duty of loyalty
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
administrative law judge - decision - order
Sarbanes-Oxley Act

10. Bank reconcilation
board of directors
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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.

11. Types of proceedings protected under SOX?
Investigations - Legal proceedings
duty of loyalty
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
quorum

12. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
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
public companies
derivative lawsuit
termination - demotion - suspension - threats - harassment

13. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
annual report
Any officer - contractor - subcontractor - agent - or employee of a company
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)
15

14. 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
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
Sarbanes-Oxley
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
buy-and-sell agreement

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

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16. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
Cash Register
They can have their stocks delisted by the national securities exchange and associations
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
quorum

17. Elements of Internal Control
duty of care
preemptive rights
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

18. Bank statement
cumulative voting
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
Allows a business to reconcile the cash transactions recorded
board of directors

19. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
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
business judgment rule
Sarbanes-Oxley

20. What is required to qualify as a protected whistleblower
record date
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)
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

21. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
officer
terms - conditions
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)
negligence

22. Special-purpose cash funds
officer
Allows a business to reconcile the cash transactions recorded
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
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

23. Company representative
outside 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
petition - Administrative Review Board - 10
Any officer - contractor - subcontractor - agent - or employee of a company

24. 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
annual report
They can have their stocks delisted by the national securities exchange and associations
fiduciary duties
duty of loyalty

25. To be protected by sox an employee must do one of what activities?
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
outside director
supramajority voting requirement
right of first refusal

26. The Board can either adopt the judge's decision as its own or __ the case itself
review
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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 only needed to show that he or she had a reasonable belief that the conduct constituted fraud

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

28. Under what conditions may an employee claim protection of SOX?
15
duty of care
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
Allows a business to reconcile the cash transactions recorded

29. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
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
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
fiduciary duties

30. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
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
record date
Cash Register
duty of care

31. 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
duty of obedience
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
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
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)

32. Additional shares of stock distributed as a dividend
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
stock dividend
Cash Register

33. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the 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
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
derivative lawsuit
Sarbanes-Oxley

34. 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
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.
interference with employment or livelihood of the informant
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
cumulative voting

35. The employee must also service the notice on whom?
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
proxy
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 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)

36. Public company
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
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
special shareholders' meetings

37. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
officer
retaliates against a whistleblower
Cash Register
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)

38. SOX creates __ for company representatives.
personal liability
review
special shareholders' meetings
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

39. Sox important Organizations that you must know
annual report
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

40. Objectives of Internal Control
special shareholders' meetings
voting trust
A control for cash recevied throught the mail
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

41. 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
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
terms - conditions
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
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

42. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
terms - conditions
They can have their stocks delisted by the national securities exchange and associations
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. 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
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
petition - Administrative Review Board - 10
Investigations - Legal proceedings

44. A member of the board of directors who is also an officer of the corporation
duty of loyalty
personal liability
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.
inside director

45. 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

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46. How does this Act define 'harm'?
interference with employment or livelihood of the informant
officer
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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

47. A panel of decision makers who are elected by the shareholders
petition - Administrative Review Board - 10
60
preemptive rights
board of directors

48. Voucher
termination - demotion - suspension - threats - harassment
fiduciary duties
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
business judgment rule

49. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
quorum
special shareholders' meetings
fiduciary duties
annual report

50. The penalties that may be imposed under SOX.
duty of obedience
The person or company must present it's evidence within 20 days after it receives the complaint
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 employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

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