SIE Exam: Securities Industry Essentials Exam Lessons and Information podcast

June 20, 2023 2023 SIE Exam Lesson 25 Sarbanes-Oxley Act Quiz

SIE Exam Lesson 25 Sarbanes-Oxley Act Quiz

This is a SIE Exam Lesson 25 Sarbanes-Oxley Act Quiz which is the Sarbanes Oxley Act, See how you do if you need help listen to the lesson over.

Questions covered include

1. The Uniform Securities Agent State Law Examination is also known as the ___.

2. Blue sky laws are federal regulations.

A. True

B. False

3. An offering that is exempted from federal regulation is always exempted from state regulation.

A. True

B. False

4. A person has registered his securities in the Securities and Exchange Commission but he wants those securities be recognized in a certain state. What kind of registration does he need to file?

A. registration by coordination

B. registration by filing

C. registration by notification

D. registration by qualification

5. Taking orders from customers in a certain state requires broker-dealers to be registered in that state.

A. True

B. False

6. This rule separated the conflicts of interest that were inherent between the underwriter and the research analyst.

A. Prudent Man Rule

B. Sarbanes-Oxley Act

C. Securities Investor Protection Act

D. Trust Indenture Act

7. Which of the following would a prudent man likely to do?

A. buy government securities for his client

B. buy naked options for his client

C. buy penny stocks for his client

D. short stocks in the client’s account

8. Which of the following will most likely be found in the legal list of securities that fall within the prudent man rule?

(Select all that apply.)

A. government securities

B. highly rated corporate bonds

C. highly rated municipal bonds

D. 144 stocks

9. The Trust Indenture Act of 1939 requires a trust indenture for a corporate bond offering of at least ___.

10. Which of the following is true about the Investment Advisor Act of 1940?

(Select all that apply.)

A. It covers firms that offer wrap accounts and charge fees.

B. It covers the people who charge a fee for investment advice.

C. It only applies if the investment advisor gives advice to 15 or more people.

D. It requires that investment advisors pass the Series 7 Examination.

11. The Securities Investor Protection Corporation protects the customer’s assets up to ___.

12. A client has an IRA account and a regular account. Under the Securities Investor Protection Act of 1970, the client has only one account.

A. True

B. False

13. The Federal Telephone Consumer Protection Act prohibits unsolicited calls before 8:00 A.M. or after 9:00 P.M. of the local time of the caller.

A. True

B. False

14. Which of the following is true about the Do Not Call list? (Select all that apply.)

A. A firm can only call the persons listed on the Do Not Call list during weekdays on office hours but not on weekends and non-office hours.

B. A person listed on the Do Not Call list can bring civil law enforcement actions against the firm that calls him.

C. It applies to unsolicited faxes.

D. The caller must identify himself by name, firm, and where he’s coming from when calling a person on the Do Not Call list so that his call may be entertained.

15. Which of the following does the Sarbanes-Oxley Act require?

A. It requires accounting firm to combine their management consultation business with their auditing business.

B. It requires accounting firm to have both management consultation business and auditing business.

C. It requires accounting firm to have either management consultation business or auditing business but not both.

D. It requires accounting firms to separate their management consultation business from their auditing business.

16. According to the Sarbanes-Oxley Act, an accounting firm acting as auditors for the firm has to report to the ___.

A. independent directors of the corporation

B. board of directors audit committee

C. Security and Exchange Commission

D. stockholders

17. According to the Sarbanes-Oxley Act, the CEO and CFO of the issuing company should not be employed by the company’s audit firm for ___.

A. one year after the audit

B. one year preceding the audit

C. six months after the audit

D. six months preceding the audit

18. According to the Sarbanes-Oxley Act, they must certify annually the financial statements in the 10-Q and 10-K reports.

(Select all that apply.)

19. According to the Sarbanes-Oxley Act, insider trade reports have to be made public through the 8-K reports, which must be filed within ___ business days.

20. The Sarbanes-Oxley Act gives insiders who trade a stock outside the blackout period ___ business days to report their trade.

We hope you did well on this SIE Exam Lesson Sarbanes Oxley Act Quiz

The Sarbanes-Oxley Act (SOX)

The Sarbanes-Oxley Act (SOX) is a comprehensive legislation enacted in the United States in 2002 to enhance corporate governance and improve the accuracy and reliability of financial reporting. While the primary focus of SOX is on public companies, its impact extends to various professionals in the financial industry, including financial consultants. Here’s how SOX affects financial consultants and why it can be beneficial for their clients:

1. Increased Demand for Financial Consultants: SOX introduced stricter regulations and compliance requirements for public companies. As a result, organizations often seek the expertise of financial consultants to help them navigate the complexities of SOX compliance. This has created an increased demand for financial consultants, providing more opportunities for professionals in this field.

2. Expertise in Internal Controls and Risk Management: SOX places a strong emphasis on internal controls and risk management. Financial consultants play a crucial role in assisting companies with the development, implementation, and evaluation of internal controls to ensure compliance with SOX requirements. They help identify potential risks and weaknesses in financial reporting processes and provide guidance on improving controls and mitigating risks.

3. Audit and Assurance Services: SOX requires companies to undergo regular independent audits of their internal controls and financial statements. Financial consultants often collaborate with external auditors to perform these audits and provide assurance services. They assist in evaluating the effectiveness of internal controls and ensure that financial statements are accurate and reliable, which enhances investor confidence in the company’s financial reporting.

4. Ethical Standards and Corporate Governance: SOX established ethical standards for corporate governance and accountability. Financial consultants play a crucial role in promoting and enforcing these standards within organizations. They assist in developing and implementing codes of conduct, ensuring compliance with ethical guidelines, and monitoring adherence to corporate governance principles. This helps in fostering a culture of transparency, integrity, and accountability within client organizations.

5. Enhanced Investor Protection: SOX aims to protect investors by improving the accuracy and reliability of financial information. Financial consultants contribute to this goal by assisting companies in producing transparent and accurate financial reports. By ensuring compliance with SOX regulations, financial consultants help build trust between companies and their investors, which can positively impact the overall financial market.

6. Risk Mitigation and Fraud Prevention: SOX requires companies to implement measures to detect and prevent fraudulent activities. Financial consultants assist in identifying potential fraud risks, implementing anti-fraud controls, and conducting investigations when fraudulent activities are suspected. Their expertise in financial analysis and risk assessment helps clients establish robust systems to mitigate the risk of fraud, protecting the interests of stakeholders.

In summary, the Sarbanes-Oxley Act has had a significant impact on financial consultants. It has increased demand for their services, expanded their role in internal controls and risk management, and emphasized the importance of ethical standards and corporate governance. By ensuring compliance with SOX regulations, financial consultants contribute to enhancing transparency, mitigating risks, and protecting the interests of investors, ultimately benefiting both their clients and the financial industry as a whole.

Total Course 37 hours 10 Min

37 hours 10 Min of audio instruction to help you prepare for the Securities Industry Essentials Exam

59 Audio Lessons for Securities Industry Essentials Exam

13 Bonus Lessons about the finance industry

Securities Industry Essentials Exam Podcast Audio Lessons for the SIE Exam

The full course details:

37 hours 10 Min of audio instruction to help you prepare for the Securities Industry Essentials Exam

59 Audio Lessons for Securities Industry Essentials Exam

13 Bonus Lessons about the finance industry

Securities Industry Essentials Exam Podcast Audio Lessons for the SIE Exam

New Series 7 Exam and SIE Exam details.

All candidates now must now pass both the SIE exam (securities industry essentials exam) as well as the New Top-Off Series 7 Exam. A Series 7 candidate must also have an industry sponsor in order to take the examination to take the SIE Exam the candidate simply needs to be 18 years old and no broker affiliation is needed..

https://www.finra.org/industry/essentials-exam

“Securities Industry Essentials (SIE) Exam

Available Beginning October 1, 2018

The Securities Industry Essentials (SIE or Essentials) Exam, available beginning October 1, 2018, is a new FINRA exam for prospective securities industry professionals. This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices.

Key Features of the Essentials Exam

________________________________________

• The Essentials exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers.

• Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.

• Essentials exam results are valid for four years.

The Essentials Exam at a Glance

________________________________________

Number of Items 75

Format Multiple Choice

The New Series 7 Content Outline provides a comprehensive guide to the range of topics covered on the exam, as well as the depth of knowledge required. The outline is comprised of the four main job functions of a general securities representative. The table below lists the allocation of exam questions for each main job function.

Major Job Functions Percentage of Test Questions Number of Test Questions

(F1) Seeks Business for the Broker-Dealer from Customers and Potential Customers 7% 9

(F2) Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives 9% 11

(F3) Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records 73% 91

(F4) Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions 11% 14

TOTAL 100% 125”

The five job functions of the new Series 7 General Securities Representative Exam will be:

“Seeks business for the broker-dealer through customers and potential customers”

“Evaluates customers’ financial status, financial needs and risk tolerance, and helps them identify their investment objectives”

“Opens accounts, transfers assets and maintains appropriate account records”

“Provides customers with information on investments and makes suitable recommendations”

“Obtains and verifies customer’s purchase and sales instructions, enters orders and follows up”

These five functions of the new series 7 exam are the same or substantially similar to ones on the current Series 7 exam. A notable change from the existing Series 7 exam is the addition of evaluating customer “risk tolerance.”

https://www.finra.org/industry/series7

Here is a link to the table of Contents

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New Series 7 Exam and SIE Exam details.

FINRA has announced major changes to the Series 7 Exam effective October 1, 2018. With the introduction of the Securities Industries Essentials Exam (SIE Exam) the new series 7 has been pared down to 125 questions from its original 250 questions.

https://www.finra.org/industry/series7

However there is now a prerequisite before taking the new Series 7 Exam all candidates now must have passed the SIE exam (securities industry essentials exam). In addition thing a series 7 candidate must also have an industry sponsor in order to take the examination.

https://www.finra.org/industry/essentials-exam

“Securities Industry Essentials (SIE) Exam

Available Beginning October 1, 2018

Key Features of the Essentials Exam

________________________________________

• The Essentials exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers.

• Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.

• Essentials exam results are valid for four years.

The Essentials Exam at a Glance

________________________________________

Number of Items 75

Format Multiple Choice