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. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
fiduciary duties
voting trust
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


2. The Board can either adopt the judge's decision as its own or __ the case itself
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Sarbanes-Oxley Act
review
derivative lawsuit


3. 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
administrative law judge - decision - order
stock dividend
Investigations - Legal proceedings


4. What are the conditions under which OSHA will investigate individual complaints?
Sarbanes-Oxley Act
petition - Administrative Review Board - 10
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
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


5. 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
The employee can file a lawsuit in federal district court
A control for cash recevied throught the mail
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6. Sarbanes-Oxley Act of 2002
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
shareholder voting agreement
Sarbanes-Oxley Act
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.


7. Why did Congress pass SOX?
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
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


8. Additional shares of stock distributed as a dividend
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
stock dividend
fiduciary duties


9. 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
supramajority voting requirement
review
cumulative voting
terms - conditions


10. What new employee right was created by SOX?
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.
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)
outside director
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


11. Personal liability provision
board of directors
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
all employees who work for public companies as long as they qualify as a whistleblower
negligence


12. 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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13. Special-purpose cash funds
officer
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
A control for cash recevied throught the mail
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


14. A panel of decision makers who are elected by the shareholders
board of directors
buy-and-sell agreement
Sarbanes-Oxley Act
record date


15. 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
retaliates against a whistleblower
duty of loyalty
supramajority voting requirement
dividend


16. 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?
cumulative voting
annual shareholders' meeting
right of first refusal
The employee can file a lawsuit in federal district court


17. Under what conditions may an employee claim protection of SOX?
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
quorum
duty of loyalty
duty of obedience


18. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
retaliates against a whistleblower
public companies
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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)


19. An agreement between two or more shareholders that stipulates how they will vote their shares
annual shareholders' meeting
shareholder voting agreement
A control for cash recevied throught the mail
termination - demotion - suspension - threats - harassment


20. 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
review
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.
dividend
buy-and-sell agreement


21. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
terms - conditions
special shareholders' meetings
annual report
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed


22. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
Investigations - Legal proceedings
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
duty of obedience
derivative lawsuit


23. Elements of Internal Control
stock dividend
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
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


24. The SEC regulations to not require companies to follow what?
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 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
They are not protected
special shareholders' meetings


25. 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
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
Any officer - contractor - subcontractor - agent - or employee of a company
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


26. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
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Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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


27. SOX deadlines

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28. If a hearing is requested - it will be held before an __ who will issue a __ and __.
termination - demotion - suspension - threats - harassment
administrative law judge - decision - order
preemptive rights
They are not protected


29. Sox important Organizations that you must know
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
annual shareholders' meeting
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication


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

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31. Remittance Advice
retaliates against a whistleblower
A control for cash recevied throught the mail
all employees who work for public companies as long as they qualify as a whistleblower
The person or company must present it's evidence within 20 days after it receives the complaint


32. 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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33. 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
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
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petition - Administrative Review Board - 10
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


34. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
negligence
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.
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derivative lawsuit


35. Objectives of Internal Control
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
voting trust
Any officer - contractor - subcontractor - agent - or employee of a company
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


36. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
They can have their stocks delisted by the national securities exchange and associations
duty of obedience
proxy
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.


37. What is the stated purpose of SOX?
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
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)
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
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


38. Usurping of corporate opportunity

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39. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
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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
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)
administrative law judge - decision - order


40. Voucher System
supramajority voting requirement
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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
They can have their stocks delisted by the national securities exchange and associations


41. 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
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG


42. The company or person must present evidence within __ days after receiving notice of the complaint.
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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shareholder voting agreement
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


43. The number of directors necessary to hold a board meeting or transact business of the board
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.
quorum
all employees who work for public companies as long as they qualify as a whistleblower
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


44. What procedures must the audit committee of a public company establish?
administrative law judge - decision - order
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
terms - conditions
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.


45. SOX (or SARBOX)
derivative lawsuit
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Sarbanes-Oxley
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)


46. SOX creates __ for company representatives.
proxy
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
officer
personal liability


47. Examples of complaints found not to be covered under SOX
administrative law judge - decision - order
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)
proxy
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


48. 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
board of directors
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
proxy
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


49. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
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)
annual report
duty of care
Sarbanes-Oxley Act


50. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
quorum
derivative lawsuit
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
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