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. The company or person must present evidence within __ days after receiving notice of the complaint.
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
20
annual shareholders' meeting
terms - conditions


3. Voucher 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
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
annual shareholders' meeting


4. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
preemptive rights
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
60
public companies


5. Usurping of corporate opportunity

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6. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
public companies
60
quorum
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


7. 4 elements that must be proven to show usurping of corporate opportunity:

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8. Special-purpose cash funds
all employees who work for public companies as long as they qualify as a whistleblower
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
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


9. Bank accounts
personal liability
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
stock dividend
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


10. Types of proceedings protected 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
quorum
Investigations - Legal proceedings
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


11. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
voting trust
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
Sarbanes-Oxley


12. 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
straight voting
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
cumulative voting


13. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
15
They can have their stocks delisted by the national securities exchange and associations
preemptive rights
quorum


14. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
Sarbanes-Oxley Act
preemptive rights
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud


15. 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
Any officer - contractor - subcontractor - agent - or employee of a company
proxy
quorum
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG


16. Sox important Organizations that you must know
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
straight voting
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


17. What employees are protected under SOX?
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
Sarbanes-Oxley Act
right of first refusal
all employees who work for public companies as long as they qualify as a whistleblower


18. The number of directors necessary to hold a board meeting or transact business of the board
quorum
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
straight voting
The employee can file a lawsuit in federal district court


19. Remittance Advice
A control for cash recevied throught the mail
15
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
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.


20. A requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders
duty of obedience
supramajority voting requirement
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
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.


21. 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
piercing the corporate veil
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
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
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


22. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG
30
voting trust
board of directors


23. Why did Congress pass SOX?
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
The person or company must present it's evidence within 20 days after it receives the complaint
stock dividend
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders


24. A report provided to shareholders that contains a balance sheet - an income statement - and a statement of changes in shareholder equity
annual report
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
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.
piercing the corporate veil


25. Bank reconcilation steps
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
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed
60


26. Elements of Internal Control
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication
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
shareholder voting agreement


27. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.
derivative lawsuit
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
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


28. SOX (or SARBOX)
Sarbanes-Oxley
shareholder voting agreement
preemptive rights
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


29. A panel of decision makers who are elected by the shareholders
right of first refusal
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
duty of care


30. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
Cash Register
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
preemptive rights
negligence


31. SOC record keeping requirements
record date
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
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
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


32. To be protected by sox an employee must do one of what activities?
board of directors
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
60


33. 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
right of first refusal
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
15


34. The SEC regulations to not require companies to follow what?
derivative lawsuit
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)
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 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


35. What is one of the most important controls to protect cash received in over-the-counter sales?
Cash Register
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
Any officer - contractor - subcontractor - agent - or employee of a company
right of first refusal


36. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
shareholder voting agreement
proxy
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
record date


37. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
Allows a business to reconcile the cash transactions recorded
termination - demotion - suspension - threats - harassment


38. Bank statement
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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
Allows a business to reconcile the cash transactions recorded
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations


39. The employee must also service the notice on whom?
review
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.
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 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)


40. 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
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)
duty of loyalty
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


41. 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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42. Objectives of Internal Control
all employees who work for public companies as long as they qualify as a whistleblower
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
duty of care
petition - Administrative Review Board - 10


43. A member of a board of directors who is not an officer of the corporation
A control for cash recevied throught the mail
outside director
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
Sarbanes-Oxley


44. What is the stated purpose of SOX?
business judgment rule
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
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


45. 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
interference with employment or livelihood of the informant
board of directors
60


46. 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
terms - conditions
petition - Administrative Review Board - 10
record date
Any company that has a class of securities registered with the Securities and Exchange Commission (SEC) under 15 U.S.C.


47. What new employee right was created by SOX?
duty of loyalty
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
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
personal liability


48. Voucher
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
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
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


49. What provision is enforced by the SEC only?

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50. 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
proxy
30
duty of obedience
annual report