B1 - M3: SOX Flashcards
What is Form 10K?
An Annual Report required by the SEC that gives a comprehensive summary of a company’s financial performance.
In what ways can an Audit Committee Financial Expert qualify for this role without direct industry experience?
Education, Experience Supervising a Financial Officer, Experience overseeing auditors, or other relevant experience.
What is necessary to be an Audit Committee Financial Expert?
Experience with Internal Accounting Controls.
Sarbanes-Oxley requires _____ to ensure appropriate Board Oversight?
Audit Committee
Members of the Audit Committee must be _______?
Members of the Board of Directors, but otherwise independent.
The Prison Term for knowingly obstructing or influencing a financial investigation under the juristiction of a US agency is?
20 Years
SOX requires that the Management Report on Internal Controls include ______?
A statement accepting managements responsibility for internal controls, A statement about the effectiveness of the company’s internal controls, A statement that the auditor has attested and reported on Management’s evaluation of internal controls
SOX requires that a Board of Directors MUST HAVE which committees?
SOX only requires that a Board of Directors have an audit committee. All others like compensation and nominating committee are optional.
Per SOX requirements, do ALL members of the Board have to be independent?
No.
TRUE OR FALSE:
According to SOX, Codes of Ethics must contain requirements for Prompt Internal reporting of ethics violations.
FALSE.
This was proposed, but was deemed a nice to have.
TRUE OR FALSE:
According to SOX, Codes of Ethics must contain requirements for Full, Fair, Accurate, and Timely Disclosure in the Financial Reports.
TRUE.
Who is responsible for establishing Whistle-Blower mechanisms and procedures?
The Audit Committee
Is the Audit Committee Chairperson required to certify that quarterly reports filed with the SEC are presented fairly?
No. That is the responsibility of the CEO and CFO.
Is the Audit Committee responsible for evaluating and reporting on the effectiveness of the company’s internal controls over financial reporting?
No. That is the responsibility of the external auditors which the audit committee appoints.
TRUE OR FALSE:
SOX requires a disclosure attesting that a Codes of Ethics has been adopted by all employees of the company.
FALSE.
The company must attest that SENIOR OFFICERS (e.g. CEO, CFO, Controller) have adopted a code of ethics. If this has not happened, an explaination must be provided.
