Which of the following carries the primary responsibility for promoting effective functioning, ethical conduct, and professional behavior throughout the company? O CEO O Management O Board of Directors O All of the above Which of the following SOX sections require management and auditors to test and report on the effectiveness of internal controls? O Section 404 O Section 302 O Section 401 O Section 409 The PCAOB shall conduct a continuing program of inspections to assess the degree of compliance of each registered public accounting firm with SOx, the rules of the PCAOB, the rules of the Commission, or professional standards, in connection with its performance of audits, issuance of audit reports, and related matters involving issuers. Inspections required by this section shall be conducted: O Annually with respect to each registered public accounting firm that regularly provides audit reports for more than 500 issuers O Annually with respect to each registered public accounting firm that regularly provides audit O Annually with respect to each registered public accounting firm that regularly provides audit O Not less frequently than once every 3 years with respect to each registered public accounting reports for more than 200 issuers. reports for more than 100 issuers firm that regularly provides audit reports for 200 or fewer issuers. It shall be unlawful for a registered public accounting firm that performs for any issuer any audit to provide to that issuer, concurrently with the audit, any non-audit service except for O Financial information systems design and implementation O Broker or dealer, investment adviser, or investment banking services O Tax services approved by the issuer's audit committee O Appraisal or valuation services, fairness opinions, or contribution-in-kind reports It shall be unlawful for a registered public accounting firm to provide audit services to an issuer if the lead audit partner has performed audit services for that issuer in each of the previous fiscal years of that issuer 6 03 It shall be unlawful for a registered public accounting firm to perform for an issuer any audit service required by this title, if a chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for the issuer, was employed by that registered independent public accounting firm and participated in any capacity in the audit of that issuer during theperiod preceding the date of the initiation of the audit O 1-year O 2-year O 3-month O 6-month The principal executive officer or officers and the principal financial officer or officers, or persons performing similar functions certify in each annual or quarterly report filed that they have reviewed the report and that to the best of their knowledge the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition and results of operations of the issuer as of, and for, the periods presented in the report. In doing so the signing officers acknowledge all the following except O Are responsible for establishing and maintaining internal controls O O O Have evaluated the effectiveness of the issuer's internal controls as of a date within 180 days Have designed such internal controls to ensure that material information relating to the issuer and its consolidated subsidiaries is made known to such officers by others within those entities, particularly during the period in which the periodic reports are being prepared Have presented in the report their conclusions about the effectiveness of their internal controls based on their evaluation as of that date prior to the report SOX requires the SEC to prescribe rules requiring each annual report required by section 13/a) or 15(d) of the Securities Exchange Act of 1934 to contain an internal control report, which shall: O O O State the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting Contain an assessment, as of the end of the most recent fiscal year of the issuer, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting Neither item "a" or "b Both items "a" and "b O reports containing financial statements filed by an issuer with the Securities Exchange Commission pursuant to Periodic section 13(e) or 15(d) of the Securities Exchange Act of 1934 shall be accompanied by a written statement by the he executive officer and chief financial officer (or equivalent thereof) of report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects the issuer. The statement shall certify that the periodic Securities and results of operations of the issuer. If an officer signing the report willfully certifies any statement knowing that the periodic report accompanying the statement does not comport with all the requirements set shall be fined not more thanor imprisoned not more than years, or both. forth in SOX o $5,000,000 / 20 o $1,000,000 / 10 O s500000/5 O $250,000/3 The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) established the Financial Stability Oversight Council. The purposes of the Council includes the following items except To promote market discipline, by eliminating expectations on the part of shareholders, creditors, and counterparties of such companies that the Government will shield them from losses in the O event of failure O O To respond to emerging threats to the stability of the United States financial system To identify those corporations who ongoing solvency is so critical to national security that they are classified as 'too big to fall O To identify risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected bank holding companies or nonbank fin ancial companies According to Dodd-Frank, the Federal Deposit Insurance Corporation shall take such steps as may be necessary for the reserve ratio of the Deposit Insurance Fund to reachpercent of estimated insured deposits by September 30 O 100/2010 O 135/2020 O 2.00/2010 O 250/2020 Dodd-Frank permanently increased the standard maximum deposit insurance amount to O $100,000 o $200,000 O s250,000 O $500,000 Dodd-Frank established, at the Securities and Exchange Commission (SEC), the Investor Advisory Committee whose purpose is to advise the SEC on the following except O Initiatives to protect investor deposits O issues relating to the regulation of securities products, trading strategies, and fee structures, and the effectiveness of disclosure O Regulatory priorities of the Commission O initiatives to promote investor confidence and the integrity of the securities marketplace Dodd-Frank requires that the members of the compensation committee be O Independent O Independently wealthy O A member of the board of directors of the company O Both a and b O Both a and c Dodd-Frank called for rules that require an issuer to disclose in the annual proxy sent to investors the re asons why the issuer s chosen either () the same person to serve as chairman of the board of directors and chief executive officer (or in equivalent positions); or (2) different in dividuals to chairman of the board of directors and chief executive officer (or serve as positions of the issuer). Think through this - which of the following is the least important reason for separating the two functions and filling them with different individuals: O t is the board of directors that votes to approve and increase executive pay When the CEO is also the chairman, a conflict of interest arises, as the CEO is voting on his or her own O One large annual salary can be eliminated O A board led by an independent chairperson is more likely to identify and monitor areas of the company that are drifting from its corporate strategy and to put into place corrective measures to get it back on track O When the board is led by management, employees may be less likely to report activities such as fraud, and the audit committee may be less likely to act on such reports