Topic 10: Sarbanes-Oxley
Which of the following statements is most correct with regard to affirmative action: Affirmative action in no longer needed because Barack Obama, an African-American, is the 44th President of the United States. Affirmative action is no longer needed because Americans with disabilities can shop in most retail locations. Affirmative action is being scrutinized by the US Supreme Court. Affirmative action is less proactive with regard to hiring policies than the Civil Rights Act.
Affirmative action is being scrutinized by the US Supreme Court. Resent court cases adjudicated by the US Supreme court suggest that affirmative action initiates are being scrutinized.
Each of the following major acts and areas of labor and employment law is applicable to hiring and recruitment practices except: The Civil Rights Act of 1964 and subsequent related federal laws. Concerns over negligent hiring. Concerns over the occupational safety and health act. Discrimination in any form.
Concerns over the occupational safety and health act. Concerns related to OSH apply most directly after a person is hired.
Which of the following would NOT be considered part of the corporate governance fabric of public companies: Regulators. Board of directors. Customers. Executive management.
Customers. The corporate governance fabric is generally thought to include: board of directors, audit committee, senior / executive management, internal audit, external (independent) audit and regulators and governing bodies.
Which of the following statements is incorrect: Affirmative action is more proactive with regard to hiring policies than the Civil Rights Act. Executive order 11246 prescribes affirmative action for government contractors and subcontractors. Discrimination based on age becomes a concern for persons whose age is greater than 55 years old, the age of eligibility for AARP (American Association of Retired Persons). Age and disabilities were not specifically enumerated in the original Civil Rights Act.
Discrimination based on age becomes a concern for persons whose age is greater than 55 years old, the age of eligibility for AARP (American Association of Retired Persons). Federal law protects employees who age is 40 years or more from age discrimination.
All of the following are likely to help protect a company from lawsuits alleging negligent hiring, except: Employee reference checks. Employee drug testing. Employee education transcripts. Employee background checks.
Employee education transcripts. Education transcripts are the least unlikely source of information to reveal the types of problems for which employer are sued for negligent hiring.
Section 404 of the Sarbanes-Oxley Act of 2002, provided for increased scrutiny over which area of corporate governance: The reliability of financial reporting because CEOs must serve on the board of directors. The COSO framework that was created by the PCAOB to regulate auditor activities. Internal controls design, implementation and effectiveness. Audit committees of boards of directors were now responsible for management of the company's financial reporting efforts.
Internal controls design, implementation and effectiveness. Section 404 of SOX is probably the most well-known section of Sarbanes-Oxley that requires management to select an internal control framework and then assess the effectiveness and report annually on both the design and operational effectiveness of that framework.
Of the major acts and areas of labor and employment law, which area seems to be the most controversial at this time: Compliance with the Civil Rights Act of 1964. Compliance with the Mine, safety and Health Act. Compliance with the Fair Labor Standards Act (FLSA). Issues determining the status of an employee versus that of an independent contractor.
Issues determining the status of an employee versus that of an independent contractor. A hot topic with regard to labor issues is that of employee versus independent contractor. A recent trend has been for organizations to contract specific duties and tasks to independent contractors rather than hire the person as an employee.
The Pregnancy Discrimination Act of 1978 and related Civil Rights Act does not apply to which of the following category of women: Pregnant women. Women attempting to become pregnant. Women who have no intention of becoming pregnant. None of the above.
None of the above. The Pregnancy Discrimination Act of 1978 requires that employers treat women who are pregnant in the same manner as any employee who has a medical condition and Title VII of the Civil Rights Act states that women are protected from discrimination based either on their ability to become pregnant or actual pregnancy.
The impetus for the Sarbanes-Oxley Act of 2002 was which of the following: Excessive compensation paid to auditors for work that did not meet professional standards. The financial market meltdown where many financial institutions faced the prospect of bankruptcy. Concerns over the size and boisterousness of public company chief executive officers (CEOs) and chief financial officers (CFOs). Numerous high profile, high cost public company financial reporting frauds.
Numerous high profile, high cost public company financial reporting frauds. The numerous and costly financial reporting frauds of the early 2000s such as WorldCom, Tyco, Adelphia, Enron and other paved the way for passage of the SOX Act of 2002.
Which of the following is not believed to improve auditor independence: Prohibiting audit firms from providing most non-audit services to audited companies. Requiring audit firm lead partner rotation every seven years instead of five. Requiring the independent audit committee of the board of directors to be directly responsible for the appointment, compensation and oversight of the external auditor. Requiring pre-approval by the audit committee of the board of directors of all audit and non-audit services rendered to the client.
Requiring audit firm lead partner rotation every seven years instead of five. SOX requires audit firm lead partner rotation every five years instead of seven.
hich of the following is NOT one of the five areas of the COSO framework: Risk Management. Control Environment. Control Activities. Monitoring.
Risk Management. The five COSO framework areas are Control Environment, Risk Assessment (not management), Control Activities, Information and Communication and Monitoring.
The impact of Sarbanes-Oxley on the accounting and auditing profession was: No Impact. Negligible impact because the Act created the PCAOB that continued to let the profession self-regulate. Significant because of the creation of the PCAOB and its responsibilities provided oversight and regulation for the profession. Sarbanes-Oxley essentially wiped out 100 years of accounting and auditing self- governance for the benefit of the PCAOB.
Significant because of the creation of the PCAOB and its responsibilities provided oversight and regulation for the profession. The creation of the PCAOB and its responsibilities by the SOX act provided oversight and regulation for the accounting and auditing profession for the first time in over 100 years.
Which of the following is NOT true with regard to the Fair Labor Standards Act: The federal minimum wage must be the lowest of any jurisdiction in the United States. States and cities may create their own minimum wage that is higher than the federal standard. States and cities may create their own minimum wage as long as it is equal to or greater than the federal standard. States and cities may create their own minimum wage without regard to the federal standard.
States and cities may create their own minimum wage as long as it is equal to or greater than the federal standard. States and cities may create their own minimum wage but it must meet or exceed the federal standard, currently at $7.25 per hour.
In general, which of the following labor acts are of the most concern to employers during the hiring process: The Civil Rights Act. The Railway Act. The Occupational Safety and Health Act. The Fair Labor Standards Act.
The Civil Rights Act. During recruiting, those laws most likely to be at risk of violation include laws associated with discrimination, affirmative action and negligent hiring. The Civil Rights Act of 1964 and its extension in later laws and regulation provide broad protection to individuals against discrimination based on race, color, sex, religion, national origin, age or disabilities.
Which of the following statements is correct: The Family Medical and Sick Leave Act of 1993 is less of a concern because of improvements in healthcare. Compliance with the Mine Safety and Health Act is no longer a concern because of the large deposits of natural gas in the US. The Railway Labor Act of 1926 continues to be important despite the decline in passenger traffic on railroads. Compliance with the Fair Labor Standards Act (FLSA) is redundant given the American with Disabilities Act (ADA).
The Railway Labor Act of 1926 continues to be important despite the decline in passenger traffic on railroads. The Railway Labor Act provides employees the right to organize themselves in the form of unions and to engage in collective bargaining on behalf of the labor force. The right to form unions and engage in collective bargaining permits labor to organize and negotiate through selected representatives without interference or coercion from management or owners.
Which of the following is NOT a benefit of employers classifying workers as independent contractors: No unemployment taxes. No social security or Medicare taxes. The ability of the employing organization to guarantee the independent contractor timely retirement. The ability of the employing organization to pay for the work as completion is required.
The ability of the employing organization to guarantee the independent contractor timely retirement. The benefits to the employer of classifying workers as independent contractors are the flexibility of paying for services on an as needed basis without paying additional social security, Medicare and unemployment taxes, minimizing workers compensation insurance costs and eliminating healthcare, retirement and other employee benefits such as sick leave, vacation and employer-paid personal days.
Beyond internal controls design, implementation and effectiveness assessments, the Sarbanes Oxley act provided for which of the following: The Act established whistleblower protections for senior executives and board members of public companies who self-report accounting, internal control and audit irregularities. Created the SEC to oversee the PCAOB who in-turn oversees public company boards of directors. The companies "principal" officers, CEO and CFO, to certify and approve the integrity of their company's financial reports. Required the independent board of directors to be directly responsible for the appointment, compensation and oversight of the external auditor
The companies "principal" officers, CEO and CFO, to certify and approve the integrity of their company's financial reports. Section 302 of SOX requires that the company's "principal officers" (typically the Chief Executive Officer and Chief Financial Officer) certify and approve the integrity of their company financial reports.
Which of the following is a true statement with regard to hiring and employment practices: Companies are rarely sued for discriminatory hiring practices. The hiring process has three phases: recruiting, selection and acclimation. Unlike contracts, an offer and an acceptance of the offer is not required. The Sarbanes-Oxley Act has profound and long-term impact on the hiring and employment of auditors.
The hiring process has three phases: recruiting, selection and acclimation. The hiring process has three phases: recruiting, selection and acclimation.
