Identify the statement below that is false:

	A.	At least one fraud risk factor is generally present whenever a theft or fraud has occurred
	B.	The existence of fraud risk factors increases the risk that a theft or fraud has occurred
	C.	It is possible that a theft or fraud has occurred even though no fraud risk factors are present
	D.	The absence of fraud risk factors guarantees that a theft or fraud has not occurred

Sarbanes-Oxley (SOX) is a(n):

	A.	Framework issued by the Committee of Sponsoring Organizations
	B.	Federal law passed by the United States Congress
	C.	Auditing standard issued by the American Institute of Certified Public Accountants
	D.	Federal regulation issued by the Securities and Exchange Commission

The Public Company Oversight Board (PCAOB):

	A.	Sets the requirements for companies to be listed on national exchanges such as the New York Stock Exchange and the NASDAQ
	B.	Establishes standards for the audits of financial statements of public companies and provides oversight of the auditors of issuers
	C.	Is a federal government agency that creates general accepted accounting principles for public companies
	D.	Creates and administers federal securities laws

All corporations known as issuers must have an audit committee that has all the following requirements EXCEPT:

	A.	The committee must include a partner from the external auditors firm
	B.	Members must otherwise be independent of the corporation and not perform consulting work for the corporation or be a member of management
	C.	Audit committee members must be members of the full board of directors
	D.	At least one member must qualify as a financial expert

The audit committee serves all the following functions EXCEPT:

	A.	Appoints and compensates the external auditors
	B.	Approves the audit report issued by the external auditors
	C.	Resolves disagreements between management and the external auditors
	D.	Maintains a two-line of communication with the external auditors

Internal auditors can never be independent because they are employees of the company they audit. However, their degree of objectivity is increased if they report directly to:

	A.	The CEO
	B.	The CFO
	C.	The audit committee
	D.	The controller

Under SOX, the chief executive officer (CEO) and chief financial officer CFO of an issuer must certify all the following EXCEPT:

	A.	They have disclosed to the external auditors any fraud, whether or not material, that involves management or other employees who have a significant role in the issuers internal controls
	B.	The financial statements do not contain any misstatement or errors that are material or immaterial
	C.	Internal controls over financial reporting are effective as of the year-end date in accordance with the COSO framework
	D.	The financial statements are fair presentations

The CEO and CFO of an issuer are aware of significant deficiencies in the design or operation of internal controls which could adversely affect the issuers ability to record, process, summarize but have not identified any material weaknesses in internal controls. They must take all the following steps EXCEPT:

	A.	Disclose the existence of the significant deficiencies to the external auditors
	B.	Disclose the existence of the significant deficiencies to the audit committee
	C.	Disclose the existence of the significant deficiencies in their report on the effectiveness of internal controls over financial reporting
	D.	Certify that they have disclosed the significant deficiencies to the audit committee and the external auditors

Which of the following lending arrangements by an issuer is a violation of the conflict of interests provisions of SOX:

	A.	A credit card issued by a bank to an employee
	B.	A home equity line of credit given to an employee in the normal course of business by a financial institution with normal market terms
	C.	A home loan given to the CEO in the normal course of business by a financial institution with normal market terms
	D.	A personal loan made by a manufacturing company to its CFO

Under Sox, if an issuer is required to prepare an accounting restatement due to the material noncompliance, as a result of misconduct, with any financial reporting requirement, the CEO and CFO of the issuer shall reimburse the issuer for:

	A.	All legal fees incurred by the issuer during the 12-month period following the issuance of the misstated statements to defend against lawsuits
	B.	All fines and penalties incurred by the issuer due to the misstatement during the 12-month period following the issuance of the misstated statements
	C.	Their shares of legal judgments against the issuer due to the misstated statements during a five-year period following the issuance of the misstated statements
	D.	Any bonus or other incentive-based or equity-based compensation received during the 12-month period following the issuance of the misstated statements

Jacobs went to the human resources (HR) department of his company with evidence of what appeared to be fraud committed by several members of senior management. Shortly after going to HR, Jacobs was threatened with a demotion for performance issues never identified previously by his supervisor. A couple of months later, Jacobs was fired. If he files a complaint with the Secretary of Labor and is successful, his compensatory damages under Title VIII of the Sarbanes-Oxley Act (SOX) could include all of the following, except:

	A.	Reinstatement with equivalent seniority status to what he had when he left
	B.	An option to apply for his supervisors job once he returns
	C.	Compensation for any special damages
	D.	Back pay with interest

According to the Sarbanes-Oxley Act of 2002, an issuer must disclose whether or not it has adopted a code of ethics for which of the following?

	A.	The issuer's senior financial officers, but not for other employees of the issuer
	B.	All employees of the issuer
	C.	The audit committee
	D.	Audit staff

Under SOX, all of the following transactions involving management and principal stockholders must be disclosed to the SEC EXCEPT:

	A.	Every director of the entity who is an owner of any equity security
	B.	Every director of the entity who is an owner of any equity security
	C.	Every person who is an owner of more than 10 percent of any class of any equity security
	D.	Every person who is an owner of any equity security

The Sarbanes-Oxley Act of 2002 was enacted in response to corporate scandals that largely centered on the quality of corporate financial disclosure and highlighted the inadequate oversight of all the following parties EXCEPT:

	A.	The Board of Directors
	B.	Auditors
	C.	The FASB
	D.	Management