Government

Governance Business Ethics Risk Management and Internal Control
INSTRUCTIONS: ANSWER WITH CAPITAL LETTERS ONLY
1. Statement 1: Participation by both men and women is a key cornerstone of good governance.
Statement 2: Good governance requires mediation of differing interests in society to reach a broad consensus on what is
in the best interests of the whole community and on policies and procedures.
A. Both statements are false.
B. Both statements are true.
C. Statement 1 is true, statement 2 is false.
D. Statement 2 is true, statement 1 is false.
2. Statement 1: Civil society serves as an instrument of checks and balances on the power of the state or local government and
the business sector behavior.
Statement 2: Civil society can serve as an alternative delivery mechanism for the frontline
services.
3. Statement 1: Effective corporate governance helps in increasing the cost of capital.
Statement 2: When corporate governance is effective, it provides employees with oversight and holds boards accountable in
their management of corporate assets.
4. Statement 1: Accountability refers to a person’s willingness to accept responsibility checks and balances or to account for
one’s action.
Statement 2: Governance refers to a person’s willingness to accept responsibility or to account for one’s
action.
5. Statement 1: Good governance requires a short-term perspective on what is necessary for sustainable human development
and how to achieve the goals of such development.
Statement 2: The concept of accountability is separate and distinct from the concept of
transparency.
6. Statement 1: The state can create a conducive economic environment by maintaining social assistance programs for the
disabled.
Statement 2: The state can protect the vulnerable by maintaining social assistance programs for the
disadvantaged.
7. Statement 1: The concept of efficiency in the context of good governance covers the sustainable use of natural resources and
the protection of the environment.
Statement 2: All groups, except the most vulnerable, must have opportunities to participate in the governance
process.
8. Statement 1: The private sector plays a minor role in the economic development of a community.
Statement 2: The private sector can provide the necessary resources for the government to enable it to pursue big and wide
scale projects.
9. Statement 1: The state should establish a civil service system that is flexible enough to facilitate communication between the
public and private sectors.
Statement 2: The state may, but is not required, to create reasonable unemployment
benefits.
10. Statement 1: The state can create a conducive economic environment by enacting laws that encourage oligarchs.
Statement 2: The state can create a conducive economic environment by stabilizing
inflation.
11. Statement 1: Public expenditure management covers civil service reform and public enterprises reform.
Statement 2: Public expenditure management covers issues such as public investments and budget planning concerning
operation and maintenance.
12. Statement 1: The state should increase social disparities whenever necessary.
Statement 2: The state should discourage cultural diversity because it promotes disunity among the
people.
13. Statement 1: Debt financing is the most common method of raising capital or funds for corporations in the United Kingdom.
Statement 2: The board of directors of most companies that follow the Anglo-US model contain both executive directors and
nonexecutive directors.
14. Statement 1: The state should assist markets and communities.
Statement 2: The state should assure the business sector that government policies are fair and subject to the personal
interests of political officials.
15. Statement 1: The state should undermine the traditional structures of authority.
Statement 2: The state should centralize the administrative system as much as
possible.
16. STATEMENT 1: The Board need not carry out evaluations to appraise its performance as a body, because it would impair the
board’s objectivity.
STATEMENT 2: The Board should endeavor to exercise objective and independent judgment on some corporate
affairs. A. Both statements are false.
17. STATEMENT 1: The company should establish corporate disclosure policies and procedures that are ideal and in accordance
with best practices and regulatory expectations.
STATEMENT 2: The Company should maintain a centralized communication channel for disseminating relevant
information. A. Both statements are false.
18. The basic principle of “accountability” for effective governance answers the following questions positively, except
A. Sound disclosure policies and practices.
B. Solid foundations for management oversight
C. Meeting the information needs of investment communities.
D. Safeguards integrity in financial reporting
19. Who is responsible for ensuring the accuracy, timeliness of public reporting of financial and other information for public
companies?
A. External Auditors
B. Securities and Exchange Commission
C. Shareholders
D. Board of Accountancy
20. “Transparency and full disclosure” principle advocates the following except
A. Sound disclosure policies and practices.
B. Solid foundations for management oversight
C. Meeting the information needs of investment communities.
D. Safeguards integrity in financial reporting
21. The basic principle of "transparency and full disclosure" for effective corporate governance responds positively to the following
questions except.
A. Does the board of directors’ safeguard integrity in financial reporting?
B. Does the board meet the information needs of investment communities?
C. Can an outsider meaningfully analyze the firm's actions and performance?
D. Has the board built long-term sustainable growth in shareholders’ value for the corporation?
22. The basic principle of "accountability" for effective governance answers the following questions positively, except
A. Does the board recognize and manage risk?
B. Does the board lay solid foundations for management oversight?
C. Does the composition mix of board membership ensure an appropriate range and risk of expertise diversity,
knowledge added value?
D. Does the board promote objective, ethical and responsible decision making?
23. The rights of shareholders can be effectively upheld through the following measures except
A. By establishing an audit committee
B. By designing and disclosing a communications strategy to promote affective communication with shareholders.
C. By encouraging active participation at general meetings.
D. By requiring the external auditor to attend the annual general meeting and to answer questions about the audit.
24. To safeguard integrity in financial reporting, the business firm should do the following except
A. Establish an audit committee.
B. Request the external auditor to attend the annual general meeting.
C. Disclose the functions reserved to the board and those delegated to management.
D. Disclose the policy concerning trading in company securities by directors, officers, and employees.
25. To encourage enhanced performance by the board and management, it is recommended that the following should be adopted
except
A. Disclosure of the process for performance evaluation of the board, its committees, individual directors and by executives.
B. A remuneration committee
C. Distinguish non-executive directors’ remuneration from that of executives.
D. Establish policies on risks oversight and management.
26. The characteristic of good governance where fair legal framework is enforced impartially is
A. Participation
B. Rule of Law
C. Equity
D. Accountability
27. The following are the objectives of corporate governance, except
A. A corporate governance structure ensures equitable and fair treatment of all shareholders of the company.
B. Corporate governance enables firms to assess their behavior and actions before they are scrutinized by regulatory
agencies.
C. To protect the long-term interest of the shareholders.
D. None of the above
28. The following statements are correct about corporate governance, except
A. Defined as the system of rules, practice, and processes by which business corporations are directed and controlled.
B. The purpose of corporate governance is to facilitate effective, entrepreneurial, and prudent management that can deliver
longterm success of the company.
C. Business establishments with a strong corporate governance system are better able to limit exposure to regulatory and
fines.
D. Good corporate governance aims at ensuring a higher degree of transparency in an organization by discouraging full
disclosure of transactions in the company accounts.
29. The following are the characteristics of a good governance, except
A. Good governance requires fair legal frameworks that are in force impartially.
B. Good governance requires that institutions and processes try to serve the needs of stakeholders within a reasonable time
frame.
C. Good governance requires mediation of different interest in society to which a broad consensus on what is in the best
interests of the whole community and how this can be achieved.
D. Good governance requires unfair legal frameworks that are in force impartially.
30. Approving annual financial reports and other public documents are specific responsibilities of
A. Management
B. Board of directors
C. Shareholders
D. Employees
31. Providing oversight of the internal and external audit function, the process of preparing the annual financial statements and
public reports on internal control are the responsibility of
A. Board of directors
B. Chief executive officer
C. Chief financial officer
D. Audit committee of the board of directors
32. An independent director is expected to:
A. Apply expertise and skills in the corporation’s best interest.
B. Asset management to keep performance objectives at the top of its agenda.
C. Respect the collective, cabinet nature of the board's decision.
D. Act as conduit between the board and the organization.
33. They provide effective oversight through election of board members, approval of major initiatives such as buying and selling
stock, annual reports on management compensation, from the board.
A. Management
B. Board of directors
C. Shareholders
D. Employees
34. They are the ones who set accounting and auditing standards dictating underlying financial reporting and auditing concepts
and also, they are the one who set the expectations of audit quality and accounting quality.
A. External auditors
B. Securities and exchange commission
C. Shareholders
D. Board of Accountancy
35. Performs audit of company financial statements to ensure that the statements are free from material misstatements including
misstatements that may be due to fraud.
A. External auditors
B. Internal auditors
C. Commission on audit.
D. Chief accountant
36. The following are the specific activities of Board of Accountancy, except
A. Conducting CPA Licensure Examination
B. Audit of public company financial statements.
C. Approving auditing standards
D. Approving accounting principles
37. Audit committee activities and responsibilities include which of the following
A. Selecting the external audit firm.
B. Approving corporate strategy.
C. Reviewing management performance and determining compensation
D. None of the above.
38. Which of the following statements is true?
I. From a financial perspective, it is management’s responsibility to implement a system of external control that assures
completeness and accuracy in financial reporting.
II. The essence of any system of good corporate governance is to allow the board. and management the freedom to drive
their organization forward and to exercise the freedom without a framework of effective accountability. III. There is no
simple universal formula for good governance.
A. All statements are correct

B. Only statement I is correct
C. Both statement I & II are incorrect
D. Only statement III is incorrect
39. Which of the following statements about corporate social responsibility is NOT CORRECT?
A. As part of corporate social responsibility, companies should disclose less information about product-related risks.
B. Corporate social responsibility is a concept whereby organizations consider the needs of all stakeholders when making
decisions.
C. Corporate social responsibility extends beyond legal compliance.
D. Corporate social responsibility includes voluntary actions that satisfy stakeholder expectations.
40. On______, the Securities and Exchange Commission approved the Code of Corporate Governance for publicly listed
companies. A. December 21, 1989
B. November 11, 2016
C. November 11, 2006
D. November 12, 2016
1. Ensure the accuracy, timeliness, and fairness of public reporting of financial and other information for public companies.
2. The company should he headed by a competent, working board to foster the longterm success of the corporation
3. The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law
4. the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts all its
business, and controls its properties.
5. a group of executives given the authority by the Board of Directors to implement the policies it has laid down in the conduct
of the business of the corporation.
6. The company should be socially responsible in all its dealings with the communities where it operates.
7. A mechanism for employee participation should be developed to create a symbiotic environment

8. The company should treat all shareholders fairly and equitably, and recognize, protect, and facilitate the exercise of their
rights.
9. is necessary for a society to function in an orderly manner. It can be argued that ethics is the glue that holds a society
together
10. Be worthy of trust, keep promises, full commitments, abide by the spirit as well as the letter of an agreement
11. Be fair and open-minded, be willing to admit error
12. what category of ethical principles are the ff.
• Responsibility to serve the public • Responsibility to serve the public
• A complex body of knowledge • A complex body of knowledge
13. The category of ethical principles

• Basic justice, fairness • Concern for the well-being on welfare of others
• Respect for the rights of others. • Benevolence, trustworthiness, honesty
• Concern for the right of others • Compliance with the law
14. What category of ethical principles are the ff.

• Fair competition
• Global as well as domestic justice
• Social responsibility
• Concern for environment
15. any individual, organization, or society at large who can either affect and/or be affected by the company's strategies,
policies. business decisions and operations, in general
16. a process, effected by an entity's Board of Directors, management, and other personnel, applied in strategy setting and
across the enterprise that is designed to identify potential events that may affect the entity, manage risks to be within its risk
appetite, and provide reasonable assurance regarding the achievement of entity objectives.
17. Ia process designed and effected by the board of directors, senior management, and all levels of personnel to provide
reasonable assurance on the achievement of objectives through efficient and effective operations
18. a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price
is charged.
19. shall cover the company's subsidiaries, as well as affiliates and any party (including their subsidiaries, affiliates, and special
purpose entities), that the company exerts direct or indirect control over or that exerts direct or indirect control over the
company
20. a group of corporations that has diversified business activities in varied industries, whereby the operations of such
businesses are controlled and managed by a parent corporate entity.
21. a director who has executive responsibility for day-to-day operations of a part or the whole of the organization.
22. a person who is independent of management and the controlling shareholder and is free from any business or other
relationship
23. Be truthful, sincere, forthright, straightforward, frank, candid, do not cheat., steal, lie and deceive.
24. Be worthy of trust, keep promises, full commitments, abide by the spirit as well as the letter of an agreement
25. Members of the Board are duty-bound to apply high ethical standards, considering the interests of all stakeholders.
26. The best measure of the Board's electiveness is through an assessment process
27. The company should establish standards for the appropriate selection of an external auditor /
The company should establish corporate disclosure policies and procedures that are practical and in accordance with best
practices and regulatory expectations.
28. Board committees should be set up to the extent possible to support the effective performance of the Board's functions
29. example of prescribe set of moral principles or values

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Governance Business Ethics Risk Management and Internal Control

INSTRUCTIONS: ANSWER WITH CAPITAL LETTERS ONLY

A. All statements are correct

7. A mechanism for employee participation should be developed to create a symbiotic environment

• Responsibility to serve the public • Responsibility to serve the public

• A complex body of knowledge • A complex body of knowledge

13. The category of ethical principles

• Respect for the rights of others. • Benevolence, trustworthiness, honesty

• Concern for the right of others • Compliance with the law

14. What category of ethical principles are the ff.

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