009-Corporate governance and internal control

Q4
• What is the goal of accounting in association with business? a. producing accurate budgets b. producing accurate forecasts c. producing reliable financial statements d. producing reliable pro forma statements • Answer: c
Q5
• What are the four pillars of corporate governance? a. Respect, accountability, fairness and transparency. b. Responsibility, accountability, firmness and transparency. c. Responsibility, accountability, fairness and transparency. d. Respect, accountability, firmness and transparency. • Answer: c
Q13
• Which of the following is not a component of internal control? a. Control environment b. Information systems c. Monitoring of controls d. Risks of errors • Answer: d
Q10
• The aim of executive compensations is to: a. enrich the executive b. align the goals of the executive with the workers c. align the goals of the executive with the shareholders d. enrich the company • Answer: c
Q9
• Which of the following is not an approach for governing corporations in the interests of employees? a. Employee involvement in quality circles b. Employee involvement in local politics c. Employee share ownership d. Employee representation on board of directors • Answer: b
Q3
• What are the fiduciary obligations of the board of directors? a. maximize profits for the company b. give excessive executive compensation c. safeguard the interests of the company’s stakeholders d. allow high risk accounting practices • Answer: c
Quiz
Corporate Governance, Internal Control, Accounting Ethics
Q1
• What is the primary goal of corporate governance? a. To describe the rules and procedures for making decisions on corporate affairs. b. To monitor the corporate performance against the set objectives. c. To provide a means of achieving the set objectives. d. To monitor the performance of the CFO. • Answer: b
Q2
• Which of the statement regarding PCAOB is NOT true? a. PCAOB stands for Public Company Accounting Oversight Board b. PCAOB assumes the peer review function over registered CPA firms c. PCAOB was established before the accounting scandal of Enron d. PCAOB protects the public interest by oversight of independent audits. • Answer: c.
Q6
• What is the agency problem? a. Managers place corporate goals ahead of personal goals. b. Managers place personal goals ahead of corporate goals. c. Managers place social goals ahead of personal goals. d. Managers place corporate goals ahead of social goals. • Answer: b
Q8
• Which of the following is not used to overcome the agency problem? a. Executive compensation b. Audited financial statements c. Related party transactions d. Internal controls • Answer: c
Q12
• What is the motive behind the PCAOB Integrated Audit Concept? a. Elevation of importance of internal controls. b. Improvement of the quality and integrity of both corporate controls over financial reporting and independent financial statement audits. c. Improvement of the speed and reliability of both corporate financial reporting and independent financial statement audits. d. Elevation of importance of independent financial statement audits. • Answea cause of agency problems? a. Information asymmetry b. Information symmetry c. Information technology d. Information privacy • Answer: a
Q11
• Management’s attitude toward aggressive financial statement reporting and its emphasis on meeting project profit numbers would significantly influence an entity’s control environment when a. internal auditors report to the audit committee b. the audit committee is active in overseeing the entity’s financial reporting c. management is dominated by one shareholder with little other governance d. management does not have a stock option plan • Answer: c