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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. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
Investigations - Legal proceedings
A control for cash recevied throught the mail
business judgment rule
negligence

2. 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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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)
special shareholders' meetings

3. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
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
shareholder voting agreement
Allows a business to reconcile the cash transactions recorded
supramajority voting requirement

4. What is one of the most important controls to protect cash received in over-the-counter sales?
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
board of directors
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

5. How does this Act define 'harm'?
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
interference with employment or livelihood of the informant
voting trust
preemptive rights

6. The criminal provision of SOX
public companies
inside director
A control for cash recevied throught the mail
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

7. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
Sarbanes-Oxley Act
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
They can have their stocks delisted by the national securities exchange and associations

8. 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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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
petition - Administrative Review Board - 10
special shareholders' meetings

9. 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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
retaliates against a whistleblower
right of first refusal

10. The Board can either adopt the judge's decision as its own or __ the case itself
review
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
administrative law judge - decision - order
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)

11. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
60
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
record date
preemptive rights

12. Examples of complaints found not to be covered under SOX
The employee can file a lawsuit in federal district court
inside director
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)

13. 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
right of first refusal
retaliates against a whistleblower
officer

14. Bank statement
administrative law judge - decision - order
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)
inside director
Allows a business to reconcile the cash transactions recorded

15. 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
straight voting
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
proxy
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. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
preemptive rights
duty of loyalty
negligence
60

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

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18. The company or person must present evidence within __ days after receiving notice of the complaint.
20
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)
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Sarbanes-Oxley Act

19. Sarbanes-Oxley Act of 2002
terms - conditions
outside director
cumulative voting
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.

20. 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
derivative lawsuit
Allows a business to reconcile the cash transactions recorded
piercing the corporate veil
special shareholders' meetings

21. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
termination - demotion - suspension - threats - harassment
piercing the corporate veil
20
15

22. 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
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
quorum
duty of loyalty
stock dividend

23. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding 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
A control for cash recevied throught the mail
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.

24. A member of the board of directors who is also an officer of the corporation
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
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
quorum

25. What provision is enforced by the SEC only?

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26. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
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
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

27. Remittance Advice
A control for cash recevied throught the mail
retaliates against a whistleblower
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
straight voting

28. SOX creates __ for company representatives.
stock dividend
personal liability
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.
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

29. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
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
30
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

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

31. Voucher System
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
voting trust
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

32. Internal Complaint Procedures
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
annual shareholders' meeting
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
right of first refusal

33. The SEC regulations to not require companies to follow what?
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
interference with employment or livelihood of the informant
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)
Investigations - Legal proceedings

34. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
They are not protected
Allows a business to reconcile the cash transactions recorded
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
Cash Register

35. 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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
officer
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

36. What employees are protected under SOX?
all employees who work for public companies as long as they qualify as a whistleblower
preemptive rights
outside director
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.

37. What new employee right was created by SOX?
petition - Administrative Review Board - 10
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
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

38. SOX deadlines

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39. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
derivative lawsuit
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
Cash Register
voting trust

40. What procedures must the audit committee of a public company establish?
termination - demotion - suspension - threats - harassment
quorum
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

41. A distribution of profits of the corporation to shareholders
dividend
negligence
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
cumulative voting

42. Public company
Allows a business to reconcile the cash transactions recorded
15
quorum
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

43. The number of directors necessary to hold a board meeting or transact business of the board
quorum
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 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
retaliates against a whistleblower

44. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
Sarbanes-Oxley Act
special shareholders' meetings
business judgment rule
review

45. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
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.
derivative lawsuit
record date
voting trust

46. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
public companies
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
special shareholders' meetings
Allows a business to reconcile the cash transactions recorded

47. What is required to qualify as a protected whistleblower
review
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
administrative law judge - decision - order
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

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

49. 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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50. To be protected by sox an employee must do one of what activities?
fiduciary duties
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
duty of loyalty
cumulative voting