CPA Business Environment and Concepts (BEC) : SOX (Sarbanes Oxley) 2002
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Example Questions
Example Question #1 : Sox (Sarbanes Oxley) 2002
Which of the following criteria is necessary to be an audit committee financial expert, specified in SOX 2002?
Experience in the preparation of tax returns
Experience with internal accounting controls
Education and experience as a certified financial planner
A limited understanding of GAAS
Experience with internal accounting controls
The issuer's audit committee's financial expert must have experience with internal controls. The may be through past experience or education.
Example Question #2 : Sox (Sarbanes Oxley) 2002
An audit committee members of an issuer is required under SOX 2002 to maintain which of the following attributes:
Proficiency
Diligence
Integrity
Independence
Independence
SOX 2002 states that members of the audit committee are to be members of the board of directors but otherwise independent. To be independent, the members may not accept compensation or be an affiliated person.
Example Question #2 : Sox (Sarbanes Oxley) 2002
The Sarbanes-Oxley Act of 2002 seeks to improve investor confidence by allowing for greater transparency for all of the following issues except:
Compliance of senior officers with a code of ethics
Competency of audit committees
Means and methods for balancing risk and growth
Adequacy of internal controls
Means and methods for balancing risk and growth
ERM concepts specifically address investor issues surrounding risk and growth however SOX 2002 focuses on less strategic operations and more on financial reporting issues including ethics.
Example Question #4 : Sox (Sarbanes Oxley) 2002
According to the Sarbanes-Oxley Act of 2002, a chief executive officer who misrepresents the company's finances may be penalized by being:
Fined but not imprisoned
Fined and imprisoned
Imprisoned but not fines
Removed from corporate office and fined
Fined and imprisoned
An individual who knowingly executes securities fraud will be both fined or imprisoned not more than 20 years or both.
Example Question #5 : Sox (Sarbanes Oxley) 2002
According to SOX 2002, anyone who knowingly alters, destroys, covers up, or makes false entry in a document with the intent to obstruct an investigation within any agency of the United States may be fined and/or imprisoned for up to:
15 years
5 years
20 years
10 years
20 years
The penalty for altering documents is punished up to 20 years.
Example Question #3 : Sox (Sarbanes Oxley) 2002
The SOX 2002 code of ethics for senior officers includes and promotes:
Full, fair, accurate, and timely disclosures in periodic financial reports
Compliance with laws, rules, and regulations
Competitive pay for staff
Honest and ethical conduct including handling of conflicts of interest
Competitive pay for staff
SOX 2002 does not involve or necessitate fair pay for members of a company. It promotes the ethical and legal promotion of business.
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