401 - exclusions pertains PDF

Preview

Summary

Question 1 1 / 1 pointWhich of the following is not a principle related to Board'sGovernance ResponsibilitiesEstablishing Board CommitteesEnhancing Company Disclosure Policies and ProceduresEstablishing a Competent BoardReinforcing Board Independence Question 2 1 / 1 pointWhich of the following is n...

Description

1 / 1 point

Question 1

Which of the following is not a principle related to Board's Governance Responsibilities Establishing Board Committees Enhancing Company Disclosure Policies and Procedures Establishing a Competent Board Reinforcing Board Independence 1 / 1 point

Question 2

Which of the following is not one of the governance roles? Executive activities Policy making Strategy formulation Accountability Question 3

1 / 1 point

Costs of arrangements that help align the interests of shareholders and managers Monitoring costs Residual loss Bonding costs Finance costs 1 / 1 point

Question 4

Which is not part of the corporate governance triangle? Management Board of directors Shareholders Main bank Question 5

1 / 1 point

Concerned with leading the company, and monitoring and controlling the decisions of management to ensure that the business meets its objectives. Board of Directors CEO COO CFO 1 / 1 point

Question 6

Which model of corporate governance emphasizes worker rights? Philippine Model Japanese Model German Model US Anglo Saxon Model 1 / 1 point

Question 7

Committees set up by the board, and consisting of selected directors, which are given responsibility for monitoring a particular aspect of the company's affairs Non Executive Directors Executive Directors Board of directors Board committees 1 / 1 point

Question 8

A system by which organizations are directed and controlled Internal Controls Ethics Corporate Goverance Risk management

1 / 1 point

Question 9

This refers to the comply or explain approach of corporate governance Sarbanes Oxley Principles Based All choices refer to comply and explain Rules Based 1 / 1 point

Question 10

This committee ensures and strengthens transparency and financial reporting Remuneration Committee Risk Committee Audit Committee Nomination Committee 1 / 1 point

Question 11

The agency theory recognizes that both the principal and the agent are together human beings strangers economic men 1 / 1 point

Question 12

The separation of the roles of Chairman of the Board and the CEO is considered an unusual setup a legal requirement a best practice a rule Question 13

1 / 1 point

Which of the following is not a type of board structure? Multi Tier All choices are board structures Principles Based Unitary 1 / 1 point

Question 14

Which of the following is one of the ways to align the interest of the principal to the agent? Pay senior managers a fixed salary regardless of performance Give management company shares as part of compensation Issue an annual report to shareholders Hire an external auditor Question 15

1 / 1 point

Which model of corporate governance emphasizes the importance of banks? US Anglo Saxon Model Japanese Model Philippine Model German Model

Corporate Governance Question 1

Which one of the following is not a function of the board of directors of a large public company? Managing the recurring operations of the business The selection of auditors Monitoring of the CEO's performance The oversight of management in the application of policies and guidelines about the

principal risks faced by the company Question 2

The board of directors may grant stock options to managers in order to Use as a substitute for bonus Save compensation costs Comply with a legal requirement Align the interest with that of shareholders Question 3

Which of the following is not something performed by the company's board? Oversees management and ensures the quality of information provided to shareholders and financial markets through the financial statements Appoints the corporate officers responsible for managing the company and implementing its strategy Day to day supervision of the sales manager Defines the company's strategy Question 4

Which one of the following defines non executive director? Who, by virtue of an agreement with the company or a resolution passed by the company in general meeting or by its board of directors or by virtue of its Memorandum of Agreement, is entrusted with substantial powers of management which would not otherwise exercisable by him Do not have much involvement in daily management of the company and do not occupy an executive management position in the company Any person, other than professional adviser, with whose instructions appointed directors of the company normally comply Who attend board meetings of a company and participate in matters put before the board Question 5

Directors' responsibilities are unlikely to include A duty to propose high dividends for shareholders A duty of care

A fiduciary duty A duty to ensure proper accounting records are kept Question 6

The cost of monitoring management is considered to be a(n) Institutional cost Transaction cost Bankruptcy cost Agency cost Question 7

Which one of the following would not be an example of agency cost? Audit fees Information asymmetry Delegated authorities Dividends Question 8

Why is it rational to make shareholders weak by giving control to the managers of the firm? All of the choices This may be rational to the extent that managers are answerable to the board of directors This may be rational when shareholders may be neither qualified nor interested in making business decisions This may be rational since may shareholders may find it easier to sell their shares in underperforming firms than to monitor the management. Question 9

Which one of the following is not a valid difference between executive and non executive directors? Executive directors tend to be involved mainly in policy making and planning exercises while non-executive directors are tasked to run the company's business

Executive directors work full time, whereas non-executive directors work part time Executive directors are involved in the management of the company, whereas nonexecutive directors are not expected to be involved in day-to-day management Non executive directors should be independent, whereas the executives will usually not be Question 10

Which of the following actions will not help directors to protect themselves from non compliance with their obligations and responsibilities? Seeking professional help Ensuring that regular management accounts are prepared by the company Including a disclaimer clause in their service contracts Keeping themselves fully informed about company affairs Question 11

What is meant by the separation of ownership and control? That those who control the company should be separate to those who own it That the law should seek to keep the owners and controllers of company apart in order to avoid an over concentration of power That the owners of companies have become separated from those who control companies The owners and controllers of companies should not act in concert to defeat resolutions Question 12

A board committee is best described as a subset of the board formed to achieve which one of the following outcomes? Being independent by having exclusively independent auditors Enhance the effectiveness of the board Report to the shareholders on specific issues Enable directors to reduce their individual liability Question 13

Which one of the following statement best describes an independent director of a listed corporation? A full time employee of a bank who is appointed to the board at the request of the bank ( a major lender to the corporation) and is instructed by the bank to always vote in the interests of the corporation's shareholders A non executive director who receives a flat fee for being a director and who accepts no additional consulting, advisory or performance related fees A non executive director who holds 20 per cent of the shares in the corporation An executive director who is a CEO but who receives no additional remuneration for being on the board Question 14

Which of the following can be considered opportunistic residual loss behaviour by an agent? Suspending negotiations with a potential acquisition target because it would not enhance shareholder wealth Purchase of an expensive painting for the managing director's office All the choices are opportunistic residual loss behaviour Investing in technology that will substantially reduce short term profit, but yield returns in the long run Question 15

According to the Cadbury definition, corporate governance is an issue of power and Rights Appropriability Accountability Profit Question 16

Which of the following is true? Conflicts of interest between management and stakeholders can result in bankruptcies or major fraud 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

The management board approves the mission, vision, objectives, and strategy of the entity It is the responsibility of the internal auditor to set the objectives for the company Question 17

Directors may not be disqualified for Persistent breaches of company legislation Paying inadequate attention to the company finances Being convicted of drunken driving Continuing to trade when the company is insolvent Question 18

Which of the following is not a goal of a greater accounting transparency? To impose more rules and harsher penalties for their violation All of the choices are goals of accounting transparency. To reduce information asymmetry between corporate insiders and the public To discourage managerial self dealings Question 19

Which of the following is not a key corporate factor driving the need for better governance? Increasing competition making high levels of performance harder to achieve Higher levels of individual taxation dissuading potential shareholders The requirement to access lower cost debt and equity finance The growth in shareholder activism Question 20

Which one of the following statements best describes characteristics likely found in agency relationships? Agents will often not provide sufficient signalling to principals. It is principally this factor that results in principals finding it necessary to engage in and pay for monitoring. It is necessary to monitor an agent extensively, even when that agent voluntarily

assumes the imposition of higher bonding costs Agents who are highly bonded will be expected to try to maximize the returns of their principal and will be expected also to seek returns for themselves. An agent will find it relatively easy to achieve the best interests of the principal in an agency relationship Question 21

Which of the following is not a benefit of having NEDs? NEDs can advise on specific issues with start up businesses NEDs increase the board's accountability to the shareholders NEDs can help increase market confidence in the business, especially in the earlier years of the company's life NEDs can better make decisions relating to the recurring transactions of the business Question 22

Which one of the following would be the best way for a shareholder to become involved in the corporate governance of a listed corporation in which they own shares? By selling their shares on the market because the corporation fails to pay dividends at an appropriate level By voting through proxy or by attendance at the general meetings of the corporation By taking an active interest and an active role in the management of the corporation By overruling board decisions, including through votes against the board in relation to non binding shareholder votes Question 23

According to the Anglo Saxon best practice, the board represents Employees Minority shareholders Shareholders All constituencies Question 24

A board member is independent when

She represents the company's only majority shareholder She has no relationship of any kind whatsoever with the corporation, its group or the management of either that is such to colour her judgment She is a top executive of the company supervised She is a family member of the CEO Question 25

Which of the following is not a desired quality of someone who wishes to be a Chief Executive Officer? Micro management skills that allows one to focus solely on detailed work particularly in the company's products/services Strategic skills that would allow for the conception and implementation of strategic objectives Persuasiveness, confidence, and communication skills most especially in dealing with colleagues and negotiation with external parties Analytical skills in major aspects of the business' operations and finances Question 26

According to the agency theory Information asymmetry does not exist The management board is the principal The management board is the agent Self interest plays no role Question 27

Which of the following is not included as one of the main roles of a Chief Executive Officer (CEO) of a listed company? to ensure that appropriate systems are in place for internal controls and the management of risk to implement the decisions of the board of the directors to analyse the performance of the board of directors to propose and develop strategies capable of making an acceptable return to shareholders Question 28

Why do corporate governance problems arise as per the agency theory? Managers act in their own self interest Profit maximization is the main objective of organizations Ownership and control is separated Stakeholders have differing levels of power Question 29

Which of the following is the best description of conflict of interest? a situation in which a person or organization is involved in singular interests, financial or otherwise, and serving one interest could involve working against another a situation in which a person is in a position to derive personal benefit from actions or decisions made either in their official or unofficial capacity a situation in which the concerns or aims of two different parties are compatible a situation in which a person's ability to act with independence and impartiality is hindered by a countervailing interest held in a cause which could be the beneficiary of decisions made Question 30

What is the meaning of OECD? Organization for Ease of Collaboration and Development Organization for Economic Co-operation and Development Organization for Ensuring Collaboration and Development Organization for Economic and Cultural Development

Internal Controls Question 1

Effective internal control over cash requires segregation of duties. Which of the following duties should be segregated? Depositing checks into the banks and recording receipts in the accounting records Both depositing checks into the banks and recording receipts in the accounting

records or opening the mail and deposit of checks in the bank Neither depositing checks into the banks and recording receipts in the accounting records or opening the mail and deposit of checks in the bank Either depositing checks into the banks and recording receipts in the accounting records or opening the mail and deposit of checks in the bank, but not both Opening the mail and deposit of checks in the bank Question 2

The University of St. Joseph, a premier higher educational institution, has identified its main risk categories as marketing, especially of its core programs; human resource sourcing; and labor piracy. Which business objective do these represent? Operational objectives Overall objectives Compliance objectives Financial reporting objectives Question 3

Which of management's concerns with respect to implementing internal control is the auditor primarily concerned? Efficiency of operations Reliability of financial reporting Effectiveness of operations Compliance with laws and regulations Question 4

When two or more persons work together to circumvent internal control procedures is called Collusion Control weakness Reasonable assurance Management override Question 5

The override required to process senior citizen discounts is an example of Specific authorization General authorization Special authorization Blanket authorization Question 6

San Jose Incorporated, a manufacturer of life sized religious statues, observes controls such as the management team regularly checks the organization's inventory, security systems are in place, and authorization policies for the access of assets and equipment are properly laid out. These are considered Corrective controls General controls Detective controls Either detective or preventive controls Preventive controls Question 7

These are policies and procedures that help ensure that management directives are carried out. Control activities Monitoring Internal control system Internal control Question 8

Which of the following is responsible for establishing a private company's internal control? External auditors COSO Management and external auditors Management Question 9

Which of the following is not a reason why the effectiveness of internal controls cannot be guaranteed? The cost of putting up internal controls is relatively expensive. The occurrence of non routine events when controls are designed for relatively routine behaviour. The control can be over or under specified. An under-specified control is one which is not capable of actually controlling the risk or activity intended. Conversely, an overspecified control is one which over-controls and may have the effect of losing the confidence of employees and others influenced by the control. Human factors can undermine or circumvent the effectiveness of many internal controls. Question 10

Internal controls can never be considered as absolutely effective because Controls are designed to prevent and detect only material misstatements Not all organizations have internal audit departments Internal controls prevent separation of duties Their effectiveness is limited by the competency and dependability of employees Question 11

Which of the following is not an example of factors that are reflected in the control environment? A company has clear lines of communication and policies that enforce integrity and ethical values. New business models, products, or activities that are undertaken by the company.

Those charged with governance actively participate in setting the direction of the company. Management's philosophy and operating style clearly reinforces its internal control culture. Question 12

Which of the following statements related to application controls is correct? Application controls relate to all aspects of the IT function Application controls relate to various aspects of the IT function including physical security and the processing of transactions in various cycles Application controls relate to various aspects of the IT function including software acquisition and the processing of transactions Application controls relate to the processing of individual transactions Question 13

To segregate duties involving cash receipts, specific responsibilities should be assigned to various employees, except when A supervisor is responsible for collecting cash at the end of each cashier's shift An employee who handles credit approval authorizes the derecognition of accounts receivable Members of the accounting department are responsible for ensuring that cash sales are properly recorded Cashiers are responsible for collecting cash and issuing a receipt at the point of sale Question 14

Which of the following is not a component of SPAM SOAP? Organization controls Authorization and approval controls Personnel controls Performance reviews Question 15

Internal control procedures for cash disbursem...