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Corporate Governance Multiple Choice
Corporate Governance Multiple Choice
Corporate Governance Multiple Choice
of the
following
statements
is true?
Conflicts of interests between management and stakeholders can
result in bankruptcies or major frauds.
It is the responsibility of internal audit to design and monitor controls
that reasonably assure that objectives are met.
The management board approves the mission, vision, objectives and
strategy of the entity.
Corporate governance addresses the principal–agent relationship
between management and directors on the one hand and the
relationship between the company and suppliers on the other.
I II III
b. No Yes Yes
c. Yes Yes No
d. Yes No Yes
a
d
b
c
Section 407 of the Sarbanes–Oxley Act states that the SEC shall issue
rules to require listed companies to disclose whether at least one
member of its audit committee is a ‘financial expert’. Which of the
following statements is not true of the ‘financial expert’?
The listed company must disclose the name of the audit committee
financial expert and whether that person is independent.
The financial expert must have experience in the preparation or auditing
of financial statements of other SEC listed companies.
The company should consider if the financial expert has experience with
internal accounting controls.
The company should consider if the financial expert has an
understanding of generally accepted accounting principles and financial
statements.
2.
Common stock that is widely distributed among individuals describes what type of corporate
governance structure?
Market.
Your Answer:
3.
4.
The Sarbanes–Oxley Act requires that executive officers attest to all the following except:
All deficiencies in internal control or any fraud has been disclosed to regulators.
Your Answer:
5.
6.
7.
Management compensation.
Your Answer:
8.
To support the supervisory role of the audit committee, the Sarbanes–Oxley Act requires the auditor
to report directly to the audit committee:
I. All critical accounting policies and practices in use by the publicly listed company.
II. Generally accepted audit standards alternatives discussed with management and any alternative
preferred by the audit firm.
III. Other material written communications such as management letters and unadjusted audit
differences.
I II III
b. No Yes Yes
c. Yes Yes No
d. Yes No Yes
b
Your Answer:
Correct Answer: a
9.
The 2012 EU Commission Communication ‘Action Plan: European company law and corporate
governance’ strives to:
10.
Cromme.
Your Answer:
Correct Answer: The Sarbanes–Oxley.
11.
Section 407 of the Sarbanes–Oxley Act states that the SEC shall issue rules to require listed
companies to disclose whether at least one member of its audit committee is a ‘financial expert’.
Which of the following statements is not true of the ‘financial expert’?
The listed company must disclose the name of the audit committee financial
Your Answer: expert and whether that person is independent.
Correct Answer: The company should consider if the financial expert has experience with
internal accounting controls.
12.
13.
Economic issues.
Your Answer:
Correct Answer: Economic, social and environmental issues.
14.
15.
16.
17.
18.
In 2006 the International Forum of Independent Audit Regulators (IFIAR) was established to:
19.
20.
Is a tool of management.
Your Answer:
director
CEO
supplier
g. In the United States, the fundamental goal of business is to: A) ensure customer
satisfaction. B) Maximize shareholder wealth. C) provide job security. D) generate
profits.
h. Multiple Choice
i. Q 71
j. In the United States, a firm's key stakeholder(s) is(are) the: A) government. B)
executives. C) shareholders. D) customers.
k. Multiple Choice