Question 1

Which of the following is a federal statute that deals with corporate bribery between U.S. companies and officials of other countries?

Accepted Answer

The Foreign Corrupt Practices Act (FCPA) is a federal statute that deals with corporate bribery between U.S. companies and officials of other countries. The Sarbanes-Oxley Act deals with corporate governance and accounting practices, the Glass-Steagall Act deals with banking regulation, and the Deregulation and Monetary Control Act deals with monetary policy.

Question 2

According to the Sarbanes-Oxley Act, members of the audit committee must be members of the board of directors.

Accepted Answer

According to Section 301 of the Sarbanes-Oxley Act, audit committee members must be independent members of the board of directors.

Question 3

The Sarbanes-Oxley Act contains provisions for prosecuting U.S. firms that bribe foreign officials.

Accepted Answer

The Sarbanes-Oxley Act focuses on improving corporate governance, accountability, and financial transparency in the United States, not on prosecuting firms for bribing foreign officials. The Foreign Corrupt Practices Act (FCPA) is the law that addresses bribery of foreign officials.

Question 4

A director who personally competes with the corporation he or she is employed in is said to have breached the duty of obedience.

Accepted Answer

The correct term is the duty of loyalty, not the duty of obedience. The duty of loyalty requires directors to act in the best interests of the corporation and not to compete with it or usurp corporate opportunities for personal gain.

Question 5

According to the Sarbanes-Oxley Act, the ________, a federal government agency, may issue an order prohibiting any person who has committed securities fraud from acting as an officer or a director of a public company.

Accepted Answer

The Securities and Exchange Commission (SEC) is responsible for implementing and enforcing the provisions of the Sarbanes-Oxley Act related to securities fraud. This includes the power to issue orders prohibiting individuals who have committed securities fraud from serving as officers or directors of public companies.

Question 6

What is the CEO and CFO provision laid out by the Sarbanes-Oxley Act of 2002?

Accepted Answer

The answer of What is the CEO and CFO provision...

Question 7

The corporation can recover any profits made by unapproved competition by a director.

Accepted Answer

The corporation has the right to recover profits made by a director through unapproved competition, as it is a breach of their fiduciary duties to the corporation. However, the process for recovering these profits may vary depending on the jurisdiction and specific circumstances of the case.

Question 8

The Sarbanes-Oxley Act requires the chief executive officer (CEO) and chief financial officer (CFO) to certify annual and quarterly reports.

Accepted Answer

The Sarbanes-Oxley Act mandates the CEO and CFO to certify annual and quarterly reports of their company. This is done to ensure the accuracy, transparency, and integrity of financial statements and to prevent corporate misconduct and fraud.

Question 9

The ________ Act is a federal statute enacted by Congress to improve corporate governance.

Accepted Answer

The Sarbanes-Oxley Act, also known as the Public Company Accounting Reform and Investor Protection Act of 2002, was enacted by Congress to improve corporate governance and restore public trust in the financial markets after the accounting scandals of the early 2000s, such as Enron and WorldCom. It established new or enhanced requirements for public company boards, management, and public accounting firms.

Question 10

What is self-dealing?

Accepted Answer

The answer of What is self-dealing?...

Question 11

The Sarbanes-Oxley Act applies only to public companies.

Accepted Answer

The Sarbanes-Oxley Act was passed by the U.S. Congress in 2002 and applies to all publicly traded companies in the United States. It was designed to improve corporate governance and prevent accounting fraud. Private companies are not subject to the requirements of the act.

Question 12

The ________ Act prohibits public companies from making personal loans to their directors or executive officers.

Accepted Answer

The Sarbanes-Oxley Act, passed in 2002, includes a provision that prohibits public companies from making personal loans to their directors or executive officers. This provision is intended to prevent conflicts of interest and ensure that executives are making decisions in the best interest of the company and its shareholders, rather than their own personal financial gain.

Quiz 37: Corporate Governance and the Sarbanes-Oxley Act