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Sarbanes Oxley Act: SOX Corporate Governance

Subjects : certifications, sarbanes-oxley

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Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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1. To be protected by sox an employee must do one of what activities?
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.
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
piercing the corporate veil
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

2. Under what conditions may an employee claim protection of 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
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations
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
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

3. 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
quorum
personal liability
duty of obedience
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

4. What employees are protected under SOX?
fiduciary duties
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.
all employees who work for public companies as long as they qualify as a whistleblower

5. If OSHA investigates - it will issue findings and a preliminary order within __ days after the complaint is filed.
60
voting trust
outside director
dividend

6. 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
Sarbanes-Oxley Act
duty of obedience
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations

7. What is one of the most important controls to protect cash received in over-the-counter sales?
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
duty of loyalty
Cash Register
all employees who work for public companies as long as they qualify as a whistleblower

8. 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
buy-and-sell agreement
shareholder voting agreement
petition - Administrative Review Board - 10
Set of procedures for authorizing and recording liabilities and cash payments. It may be either manual or computerized.

9. SOX deadlines

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10. If a hearing is requested - it will be held before an __ who will issue a __ and __.
administrative law judge - decision - order
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
derivative lawsuit
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. Why did Congress pass SOX?
In the wake of corporate scandals involving WorldCom - Enron - and other large companies accused of defrauding shareholders
20
Sarbanes-Oxley
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. Special-purpose cash funds
buy-and-sell agreement
proxy
They are not protected
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

13. Objectives of Internal Control
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
interference with employment or livelihood of the informant
retaliates against a whistleblower
Assets are Safeguarded and used for business purposes - Business information is Accurate - Employees comply with Laws and Regulations

14. A panel of decision makers who are elected by the shareholders
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
board of directors
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
duty of loyalty

15. Failure of a corporate director or officer to exercise the duty of care while conducting the corporation's business
30
negligence
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)
review

16. Rights that give existing shareholders the option of subscribing to new share being issued in proportion to their current ownership interests
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
personal liability
The employee can file a lawsuit in federal district court
preemptive rights

17. A system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates
Any officer - contractor - subcontractor - agent - or employee of a company
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.
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.
cumulative voting

18. SOX states that __ - __ - __ - __ and __ all constitute retaliation.
right of first refusal
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.
officer
termination - demotion - suspension - threats - harassment

19. A member of the board of directors who is also an officer of the corporation
Sarbanes-Oxley Act
duty of loyalty
personal liability
inside director

20. SOC record keeping requirements
business judgment rule
cumulative voting
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 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

21. 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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22. 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 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 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
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

23. SOX creates __ for company representatives.
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
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)
cumulative voting
personal liability

24. Employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation
A control for cash recevied throught the mail
Sarbanes-Oxley Act
officer
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

25. Bank accounts
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.
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
right of first refusal
30

26. Types of proceedings protected under SOX?
30
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
annual shareholders' meeting
Investigations - Legal proceedings

27. The duties of obedience - care - and loyalty owed by directors and officers to their corporation and its shareholders
Cash Register
fiduciary duties
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder fraud
special shareholders' meetings

28. Elements of Internal Control
special shareholders' meetings
record date
quorum
Control environment - Risk assessment - Control procedures - Monitoring - Information and communication

29. An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares
annual report
They can have their stocks delisted by the national securities exchange and associations
preemptive rights
voting trust

30. 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
straight voting
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
terms - conditions

31. Sox important Organizations that you must know
30
straight voting
duty of obedience
SEC - PCAOB - FASB - IASB - AICPA - CPA - IFRS - GAAP - GAO - CRARA - PSLRA - FINRA - FCPA - OSHA - ERISA - FSG

32. The employee must also service the notice on whom?
termination - demotion - suspension - threats - harassment
special shareholders' meetings
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)
They can have their stocks delisted by the national securities exchange and associations

33. 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?
business judgment rule
The employee can file a lawsuit in federal district court
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
supramajority voting requirement

34. Bank reconcilation steps
quorum
administrative law judge - decision - order
30
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

35. A date specified in corporate bylaws that determines whether a shareholder may vote at a shareholders' meeting
outside director
Help control cash by reduicng the amount of cash on hand and facilitating the transfer of cash between businesses and locations
buy-and-sell agreement
record date

36. 4 elements that must be proven to show usurping of corporate opportunity:

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37. A duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation
duty of care
Sarbanes-Oxley
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

38. What are the conditions under which OSHA will investigate individual complaints?
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
personal liability
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
dividend

39. 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
petition - Administrative Review Board - 10
Providing information about conduct he or she reasonably believes violates the federal laws - SEC regulations - or federal laws against shareholder 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
terms - conditions

40. Examples of complaints found not to be covered under SOX
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
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)
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

41. The number of directors necessary to hold a board meeting or transact business of the board
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
straight voting
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)
quorum

42. 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
duty of loyalty
The person or company must present it's evidence within 20 days after it receives the complaint
20
right of first refusal

43. The SEC regulations to not require companies to follow what?
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)
interference with employment or livelihood of the informant
cumulative voting

44. Either party may object to these findings and request a hearing within __ days after receiving the finding and order.
30
60
buy-and-sell agreement
Petty Cash Fund or travel funds are used by businesses to meet specific needs. Cashing a check for the amount of cash needed

45. A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit
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
straight voting
derivative lawsuit

46. 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
fiduciary duties
They can have their stocks delisted by the national securities exchange and associations
quorum
Any document that serves as proof of authority to pay cash or issue an electronic funds transfer.

47. How does this Act define 'harm'?
supramajority voting requirement
duty of loyalty
interference with employment or livelihood of the informant
outside director

48. Company representative
Make a complaint to specific groups or people about certain types of misconduct - Participate in certain types of proceedings relating to shareholding misconduct
Any officer - contractor - subcontractor - agent - or employee of a company
buy-and-sell agreement
Allows a business to reconcile the cash transactions recorded

49. 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
officer
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
piercing the corporate veil

50. Who signs Report for internal contro?
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.
duty of loyalty
public companies
Allows a business to reconcile the cash transactions recorded

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