Sarbanes Oxley Act: SOX Corporate Governance

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. 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
straight voting
Sarbanes-Oxley
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


2. 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
duty of care
Investigations - Legal proceedings
petition - Administrative Review Board - 10
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


3. A rule that says directors and officers are not liable to the corporation or its shareholders for honest mistakes of judgment
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
stock dividend
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
business judgment rule


4. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
board of directors
They can have their stocks delisted by the national securities exchange and associations
cumulative voting
review


5. 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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6. 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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7. Remittance Advice
termination - demotion - suspension - threats - harassment
voting trust
A control for cash recevied throught the mail
petition - Administrative Review Board - 10


8. Bank reconcilation steps
Sarbanes-Oxley
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
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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


9. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
20
retaliates against a whistleblower
preemptive rights
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


10. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
duty of obedience
inside director
derivative lawsuit
public companies


11. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
Allows a business to reconcile the cash transactions recorded
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
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
30


12. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
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)
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
voting trust
duty of loyalty


13. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
They are not protected
The person or company must present it's evidence within 20 days after it receives the complaint
all employees who work for public companies as long as they qualify as a whistleblower
officer


14. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
retaliates against a whistleblower
preemptive rights
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


15. Usurping of corporate opportunity

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16. Bank reconcilation
30
business judgment rule
A control for cash recevied throught the mail
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.


17. The penalties that may be imposed under SOX.
supramajority voting requirement
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
officer


18. The criminal provision of SOX
termination - demotion - suspension - threats - harassment
special shareholders' meetings
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


19. 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
petition - Administrative Review Board - 10
duty of obedience
quorum
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


20. An agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else
shareholder voting agreement
piercing the corporate veil
right of first refusal
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


21. 'The employee's claim of shareholder fraud does not have to be correct.'
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
The person or company must present it's evidence within 20 days after it receives the complaint
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


22. 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
buy-and-sell agreement
officer
duty of loyalty
petition - Administrative Review Board - 10


23. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
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
duty of obedience
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
annual report


24. What is one of the most important controls to protect cash received in over-the-counter sales?
duty of care
fiduciary duties
Cash Register
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.


25. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
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
supramajority voting requirement


26. What procedures must the audit committee of a public company establish?
derivative lawsuit
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
personal liability


27. A panel of decision makers who are elected by the shareholders
board of directors
shareholder voting agreement
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


28. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
retaliates against a whistleblower
supramajority voting requirement
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.
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


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


30. A member of the board of directors who is also an officer of the corporation
duty of loyalty
shareholder voting agreement
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
inside director


31. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
quorum
The person or company must present it's evidence within 20 days after it receives the complaint
30
officer


32. 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
proxy
20
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
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


33. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
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.
right of first refusal
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


34. How does this Act define 'harm'?
Sarbanes-Oxley Act
business judgment rule
interference with employment or livelihood of the informant
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


35. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
retaliates against a whistleblower
The employee can file a lawsuit in federal district court
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.
right of first refusal


36. 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
administrative law judge - decision - order
shareholder voting agreement
The employee can file a lawsuit in federal district court


37. Voucher System
officer
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
termination - demotion - suspension - threats - harassment
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.


38. 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
cumulative voting
annual report
special shareholders' meetings
derivative lawsuit


39. An agreement between two or more shareholders that stipulates how they will vote their shares
interference with employment or livelihood of the informant
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
shareholder voting agreement
board of directors


40. The company or person must present evidence within __ days after receiving notice of the complaint.
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)
20
supramajority voting requirement
personal liability


41. Personal liability provision
duty of obedience
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
officer
60


42. Sarbanes-Oxley Act of 2002
duty of care
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
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.
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


43. Elements of Internal Control
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
annual shareholders' meeting
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 officer - contractor - subcontractor - agent - or employee of a company


44. Bank statement
proxy
Any officer - contractor - subcontractor - agent - or employee of a company
Investigations - Legal proceedings
Allows a business to reconcile the cash transactions recorded


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

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46. SOC record keeping requirements
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
administrative law judge - decision - order
board of directors
A control for cash recevied throught the mail


47. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
Sarbanes-Oxley
fiduciary duties
business judgment rule
Any officer - contractor - subcontractor - agent - or employee of a company


48. 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
retaliates against a whistleblower
buy-and-sell agreement
record date
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


49. What provision is enforced by the SEC only?

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50. Additional shares of stock distributed as a dividend
stock dividend
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
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