Business Law 305 CH 35

The SOX Act seeks to increase _______ independence through setting _______ of auditing partners, and for banning _______ from providing nonauditing consulting services for public companies. (Choose all the correct answers)

accounting firms auditor mandatory rotation

The PCAOB ______, ______, and ______ the Sarbanes-Oxley Act mandates. (Choose three answers)

administer enforces implements

The Sarbanes-Oxley Act requires public companies to establish a(n) _______ and conduct for its top financial officers and generally prohibits a public corporation from _______ its officers and directors.

code of ethics, lending money to **code of ethics, overpaying** book forcing this answer but its wrong.

The Sarbanes-Oxley Act imposes higher levels of fiduciary responsibility for those involved in _______.

corporate governance

Dodd-Frank requires companies to adopt a "_______" policy through a nonbinding resolution in their proxy statements asking _______ whether they approve the compensation or any severance agreement provision for their executive management.

say-on-pay, shareholders

The Sarbanes-Oxley Act expanded the definition of _______ and created a new federal criminal law outlawing conspiracy to commit fraud.

securities fraud

_______ committees must have a structure in place to process and investigate any whistleblower complaints, and any party that engages in _______ is subject to civil action and federal criminal prosecution. (Choose two correct answers)

Audit, retaliation

Although _______ is primarily focused on financial regulation, it imposes new corporate governance regulations on both Wall Street banks and Main Street public corporations.

Dodd-Frank

Under the _______ Act, Congress imposed tighter restrictions on public corporations, financial markets, and the extent to which firms engaged in risky investment transactions.

Dodd-Frank

In the event that an employee is terminated for whistleblowing, the employee is entitled to which of the following?

Double back pay.

Congress used the Sarbanes-Oxley Act to replace the industry's self-regulation of auditing with a new federal agency called the _______ Oversight Board.

Public Company Accounting

The _______ amended both the '33 and '34 Acts to address the corporate misdeeds that became public in 2000.

Sarbanes-Oxley Act

The _______ overhauled the entire corporate governance regulatory structure.

Sarbanes-Oxley Act

The _______ provided for additional enforcement apparatus and increased penalties for violation of existing securities laws.

Sarbanes-Oxley Act

The American Recovery and Reinvestment Act of 2009 established the _________ to administer the loans.

Troubled Assets Relief Program

True or false: Congress overhauled the entire corporate governance regulatory structure with the Sarbanes-Oxley Act of 2002 (SOX Act)

True

Upon approval by a(n) _______ the SOX Act allows the SEC to force any extraordinary corporate payouts into a government-controlled _______ that is held pending further investigation by authorities.

federal court, emergency escrow fund

A(n) _______ is one that communicates information relating to illegal conduct in financial reporting or corporate governance and is protected against retaliation by the company.

whistleblower

Whistleblower rewards under Dodd-Frank range from _______% of the recovery which also has a strong anti-retaliation provision that protects the job status of SEC whisteblowers. (Choose two correct answers)

10-30

Under Sarbanes-Oxley, an individual who destroys evidence can receive up to how many years of incarceration?

20

The Sarbanes-Oxley Act imposes stricter regulation and controls on corporate: _______, _______, and _______. (Choose three correct answers)

- financial reporting - internal corporate guidance - auditing

Key provisions of the TARP loan program include: _______. (Choose all the correct answers)

- give shareholders a voice - independent compensation committees - restrictions on compensation

The SOX Act requires that public companies maintain audit committees: (Choose all correct answers)

- that have at least one director with sufficient financial acumen to probe audits in depth - that are composed entirely of independent directors

The SOX Act makes key corporate officers more accountable for financial reporting by requiring chief executive officers and chief financial officers to _______ of all required SEC filings.

personally certify the accuracy

True or false: Under the SOX Act an officer who certifies a required financial report filing knowing that the report is inaccurate will be subject to criminal penalties of up to $1 million in fines and 10 years of incarceration.

True