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. 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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2. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Cash Register
business judgment rule
duty of care


3. Under what conditions may an employee claim protection of SOX?
personal liability
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
The person or company must present it's evidence within 20 days after it receives the complaint
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


4. The SEC regulations to not require companies to follow what?
fiduciary duties
duty of loyalty
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)
They are not protected


5. SOX (or SARBOX)
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
termination - demotion - suspension - threats - harassment
Sarbanes-Oxley
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.


6. Elements of Internal Control
retaliates against a whistleblower
special shareholders' meetings
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
The person or company must present it's evidence within 20 days after it receives the complaint


7. Bank accounts
60
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.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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


8. The company or person must present evidence within __ days after receiving notice of 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
terms - conditions
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


9. 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
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
special shareholders' meetings
right of first refusal


10. SOC record keeping requirements
annual report
The person or company must present it's evidence within 20 days after it receives the complaint
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
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


11. The penalties that may be imposed under SOX.
They can have their stocks delisted by the national securities exchange and associations
Any officer - contractor - subcontractor - agent - or employee of a company
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
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


12. 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
proxy
duty of loyalty
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.


13. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
interference with employment or livelihood of the informant
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)
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
annual report


14. 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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
public companies
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


15. Special-purpose cash funds
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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
inside director
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


16. Bank statement
Allows a business to reconcile the cash transactions recorded
60
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
shareholder voting agreement


17. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
quorum
negligence
fiduciary duties
Cash Register


18. What new employee right was created by SOX?
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
record date
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
stock dividend


19. How does this Act define 'harm'?
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.
interference with employment or livelihood of the informant
administrative law judge - decision - order
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG


20. 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
personal liability
piercing the corporate veil
quorum
all employees who work for public companies as long as they qualify as a whistleblower


21. The Board can either adopt the judge's decision as its own or __ the case itself
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
review
Cash Register


22. 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
Sarbanes-Oxley Act
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
buy-and-sell agreement


23. Types of proceedings protected 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
Investigations - Legal proceedings
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.
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)


24. Company representative
retaliates against a whistleblower
voting trust
negligence
Any officer - contractor - subcontractor - agent - or employee of a company


25. 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
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.
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)


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


27. 4 elements that must be proven to show usurping of corporate opportunity:

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28. Audit committee

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29. 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
quorum
piercing the corporate veil
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
Cash Register


30. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
special shareholders' meetings
personal liability
60


31. Personal liability provision
termination - demotion - suspension - threats - harassment
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.
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
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


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
right of first refusal
proxy
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


33. 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
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
fiduciary duties
Sarbanes-Oxley Act
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


34. Usurping of corporate opportunity

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35. Additional shares of stock distributed as a dividend
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
stock dividend
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Cash Register


36. Voucher System
duty of care
retaliates against a whistleblower
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
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


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


38. Example of whistle blowing activities that DOL has found to be covered under SOX.
annual report
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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


39. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
60
The person or company must present it's evidence within 20 days after it receives the complaint
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
preemptive rights


40. Bank reconcilation
fiduciary duties
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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.
preemptive rights


41. What is required to qualify as a protected whistleblower
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
dividend
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


42. Remittance Advice
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 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
Any officer - contractor - subcontractor - agent - or employee of a company


43. Internal Complaint Procedures
The employee can file a lawsuit in federal district court
straight voting
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 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


44. Why did Congress pass SOX?
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.
outside director
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Cash Register


45. Public company
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.
Investigations - Legal proceedings
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


46. The criminal provision of SOX
Any officer - contractor - subcontractor - agent - or employee of a company
duty of loyalty
all employees who work for public companies as long as they qualify as a whistleblower
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


47. SOX deadlines

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48. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
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 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
public companies


49. The employee must also service the notice on whom?
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)
board of directors
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


50. A panel of decision makers who are elected by the shareholders
board of directors
retaliates against a whistleblower
60
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud