Cfa Ethics Quiz
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 is to oversee compensation packages for corporation employees. True False 8. The corporate governance committee represents a more public demonstration of the organization 's commitment to ethical business practices. True False 9. While the issue of corporate governance has reached new heights of media attention in the wake of recent corporate scandals, the topic has received increasing attention for over a century. True False 10. In contrast to the Cadbury report 's focus on internal governance, the King report included a code of corporate practices and conduct that went beyond the corporation itself. True False 11. "King II" formally recognized the need to move the stakeholder model forward and to consider a triple bottom line instead of a single bottom line of profitability. True False 12. The Cadbury report argued for a guideline of "comply or else." True False 13. A set of guidelines that require companies to abide by a set of operating standards or face stiff financial penalties refers to the "comply or explain" methodology. True False
5-1
Chapter 5 Quiz
14. The Sarbanes-Oxley Act of 2002 incorporates the "comply or else" approach. True False 15. Corporations who now face numerous misconduct charges often had the
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 is to oversee compensation packages for corporation employees. True False 8. The corporate governance committee represents a more public demonstration of the organization 's commitment to ethical business practices. True False 9. While the issue of corporate governance has reached new heights of media attention in the wake of recent corporate scandals, the topic has received increasing attention for over a century. True False 10. In contrast to the Cadbury report 's focus on internal governance, the King report included a code of corporate practices and conduct that went beyond the corporation itself. True False 11. "King II" formally recognized the need to move the stakeholder model forward and to consider a triple bottom line instead of a single bottom line of profitability. True False 12. The Cadbury report argued for a guideline of "comply or else." True False 13. A set of guidelines that require companies to abide by a set of operating standards or face stiff financial penalties refers to the "comply or explain" methodology. True False
5-1
Chapter 5 Quiz
14. The Sarbanes-Oxley Act of 2002 incorporates the "comply or else" approach. True False 15. Corporations who now face numerous misconduct charges often had the