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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. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
business judgment rule
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
60
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

2. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
proxy
duty of obedience
negligence
interference with employment or livelihood of the informant

3. Objectives of Internal Control
interference with employment or livelihood of the informant
inside director
public companies
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

4. 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
inside director
Cash Register
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud

5. The number of directors necessary to hold a board meeting or transact business of the board
terms - conditions
Sarbanes-Oxley
Allows a business to reconcile the cash transactions recorded
quorum

6. SOC record keeping requirements
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)
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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
Cash Register

7. 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
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
negligence
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
right of first refusal

8. A member of a board of directors who is not an officer of the corporation
outside director
duty of obedience
The employee can file a lawsuit in federal district court
The person or company must present it's evidence within 20 days after it receives the complaint

9. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
duty of care
cumulative voting
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
30

10. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
30
termination - demotion - suspension - threats - harassment
duty of care
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.

11. 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
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
negligence
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

12. 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?
The employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
buy-and-sell agreement
The employee can file a lawsuit in federal district court
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

13. A member of the board of directors who is also an officer of the corporation
inside 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
annual report
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

14. 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
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
petition - Administrative Review Board - 10
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)

15. If a public company fails to adopt the complaint procedures mandated by SOX what may happen?
duty of loyalty
They can have their stocks delisted by the national securities exchange and associations
retaliates against a whistleblower
review

16. 'The employee's claim of shareholder fraud does not have to be correct.'
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 employee only needed to show that he or she had a reasonable belief that the conduct constituted fraud
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
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.

17. 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
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
terms - conditions
straight voting
They can have their stocks delisted by the national securities exchange and associations

18. The employee must file a notice with the administrative law judge assigned to the original complaint __ days before filing the lawsuit.
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.
15
review
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

19. A panel of decision makers who are elected by the shareholders
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
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
shareholder voting agreement

20. SOX generally only applies to __ - however - it's whistleblower provision also applies to company representatives.
They are not protected
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
public companies
cumulative voting

21. 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
Investigations - Legal proceedings
all employees who work for public companies as long as they qualify as a whistleblower
duty of loyalty
voting trust

22. Sox important Organizations that you must know
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
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)
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.

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

24. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
personal liability
voting trust
preemptive rights
Sarbanes-Oxley

25. The company or person must present evidence within __ days after receiving notice of the complaint.
review
officer
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
20

26. To be protected by sox an employee must do one of what activities?
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
interference with employment or livelihood of the informant
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct

27. Remittance Advice
Cash Register
public companies
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 control for cash recevied throught the mail

28. 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
interference with employment or livelihood of the informant
quorum
termination - demotion - suspension - threats - harassment
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

29. What provision is enforced by the SEC only?

30. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
termination - demotion - suspension - threats - harassment
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.
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders

31. Types of proceedings protected under SOX?
public companies
Investigations - Legal proceedings
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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

32. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
duty of obedience
shareholder voting agreement

33. What new employee right was created by SOX?
The employee can file a lawsuit in federal district court
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)
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
dividend

34. 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

35. 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
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
voting trust
duty of obedience
duty of care

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

37. The penalties that may be imposed under SOX.
annual report
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
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)
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

38. Personal liability provision
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
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
proxy

39. What about an employee whose complaint is based on a feeling or hunch - in the absence of any evidence?
They are not protected
duty of care
proxy
inside director

40. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
special shareholders' meetings
petition - Administrative Review Board - 10
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.
fiduciary duties

41. Employees wishing to bring a lawsuit claiming they were discriminated or retaliated against in violation of SOX's whistleblower protection must first do what?

42. What is required to qualify as a protected whistleblower
voting trust
inside director
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
Allows a business to reconcile the cash transactions recorded

43. Examples of complaints found not to be covered under SOX
A control for cash recevied throught the mail
60
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
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)

44. Internal Complaint Procedures
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
record date
They can have their stocks delisted by the national securities exchange and associations
voting trust

45. 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
fiduciary duties
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.

46. 4 elements that must be proven to show usurping of corporate opportunity:

47. Even if the employee provides evidence of individual complaints - OSHA will not investigate under what condition?
The employee can file a lawsuit in federal district court
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
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
terms - conditions

48. The Board can either adopt the judge's decision as its own or __ the case itself
30
20
review
voting trust

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

50. The employee must also service the notice on whom?
Allows a business to reconcile the cash transactions recorded
all employees who work for public companies as long as they qualify as a whistleblower
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)