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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. 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
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
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.
petition - Administrative Review Board - 10
duty of loyalty

2. SOX (or SARBOX)
Sarbanes-Oxley
15
negligence
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud

3. What new employee right was created by SOX?
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
Investigations - Legal proceedings
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
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

4. What is one of the most important controls to protect cash received in over-the-counter sales?
duty of loyalty
negligence
Sarbanes-Oxley Act
Cash Register

5. Personal liability provision
60
Investigations - Legal proceedings
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

6. Bank reconcilation
outside director
piercing the corporate veil
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
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.

7. 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
duty of loyalty
administrative law judge - decision - order
preemptive rights
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

8. Types of proceedings protected under SOX?
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
officer
Investigations - Legal proceedings
stock dividend

9. 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
annual report
piercing the corporate veil
voting trust
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)

10. Objectives of Internal Control
duty of obedience
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
officer
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.

11. Examples of complaints found not to be covered under SOX
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)
cumulative voting
Investigations - Legal proceedings
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

12. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
negligence
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.
special shareholders' meetings

13. A member of a board of directors who is not an officer of the corporation
outside director
right of first refusal
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 employee can file a lawsuit in federal district court

14. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
cumulative voting
A control for cash recevied throught the mail
fiduciary duties
record date

15. What provision is enforced by the SEC only?

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16. 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
personal liability
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.
Sarbanes-Oxley Act

17. Bank statement
duty of loyalty
Allows a business to reconcile the cash transactions recorded
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
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

18. 'The employee's claim of shareholder fraud does not have to be correct.'
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
shareholder voting agreement
duty of loyalty

19. 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
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
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
Sarbanes-Oxley

20. 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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21. What is the stated purpose of SOX?
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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
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
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

22. What employees are protected under SOX?
piercing the corporate veil
personal liability
all employees who work for public companies as long as they qualify as a whistleblower
straight voting

23. To be protected by sox an employee must do one of what activities?
20
annual report
termination - demotion - suspension - threats - harassment
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

24. The penalties that may be imposed under SOX.
petition - Administrative Review Board - 10
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
stock dividend
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

25. Public company
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.
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
outside director
duty of loyalty

26. 4 elements that must be proven to show usurping of corporate opportunity:

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27. The company or person must present evidence within __ days after receiving notice of the complaint.
Any officer - contractor - subcontractor - agent - or employee of a company
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)
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
20

28. A member of the board of directors who is also an officer of the corporation
board of directors
Cash Register
inside director
buy-and-sell agreement

29. What are the conditions under which OSHA will investigate individual complaints?
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
negligence
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

30. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
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
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 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)
officer

31. The criminal provision of SOX
proxy
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
annual report
inside director

32. How does this Act define 'harm'?
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
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)
interference with employment or livelihood of the informant
30

33. 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
dividend
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
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
terms - conditions

34. Voucher System
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
The person or company must present it's evidence within 20 days after it receives the complaint
outside director
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

35. The Board can either adopt the judge's decision as its own or __ the case itself
officer
review
Investigations - Legal proceedings
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

36. Under what conditions may an employee claim protection of SOX?
preemptive rights
terms - conditions
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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

37. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
duty of obedience
inside director
termination - demotion - suspension - threats - harassment
30

38. The SEC regulations to not require companies to follow what?
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.
petition - Administrative Review Board - 10
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)
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

39. Special-purpose cash funds
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
Sarbanes-Oxley Act
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
shareholder voting agreement

40. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
straight voting
Cash Register
voting trust
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.

41. What is required to qualify as a protected whistleblower
20
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 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
Sarbanes-Oxley

42. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
supramajority voting requirement
duty of care
public companies
officer

43. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
30
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.
petition - Administrative Review Board - 10

44. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
petition - Administrative Review Board - 10
record date
all employees who work for public companies as long as they qualify as a whistleblower
duty of obedience

45. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
voting trust
They can have their stocks delisted by the national securities exchange and associations
buy-and-sell agreement
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

46. Sox important Organizations that you must know
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)
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
all employees who work for public companies as long as they qualify as a whistleblower
Cash Register

47. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
They are not protected
petition - Administrative Review Board - 10
straight voting
shareholder voting agreement

48. 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
duty of loyalty
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.
They are not protected

49. The criminal provision could apply to anyone who ____________ - whether or not the perpetrator works for or has any association with a public company
right of first refusal
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
voting trust
retaliates against a whistleblower

50. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
cumulative voting
public companies
Sarbanes-Oxley Act
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