Cfa Ethics Quiz

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Chapter 5 Quiz True / False Questions 1. Corporate governance is the system that directs and controls business corporations. True False 2. The development of a separate corporate entity limited organizations to raising funds from individual shareholders in order to grow their operations. True False 3. Managers only are accountable to their owners. True False 4. The board of directors runs the organization on a day-to-day basis. True False 5. The term outside director can be misleading because some outside members may have direct connections to the company. True False 6. The audit committee is comprised of independent specialists who have no connection to the company. True False 7. The primary responsibility of the compensation committee…show more content…
individual public shareholders B. the government C. employees D. other companies 31. A board of directors typically consists of ______. A. inside members B. shareholder members C. outside members D. both inside and outside members 32. Who oversees the governance of an organization? A. The board of directors B. The audit committee C. The frontline managers D. The compensation committee 5-3 Chapter 5 Quiz 33. Who is responsible for overseeing the financial reporting process of an organization? A. The board of directors B. The audit committee C. The frontline managers D. The compensation committee 34. Who is responsible for monitoring the ethical business practices of an organization? A. The board of directors B. The audit committee C. The governance committee D. The frontline managers 35. In 1992, who led a committee in Great Britain on the new topical issue of corporate governance? A. Daniel Everton B. Mervyn King C. Alexander Elkins D. Adrian Cadbury 36. What was the focus of the Cadbury report? A. Internal governance B. Shareholder model C. Stakeholder model D. The triple bottom line 37. The Cadbury report argued for a guideline of ______. A. "comply or resign" B. "comply or else" C. "comply or explain" D. "explain or else" 38. The Sarbanes-Oxley Act of 2002 incorporates the approach of _______. A. "comply or else" B. "comply or resign" C. "comply or explain" D. "explain or else"

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