Question 1

Which of the following is true of a corporate officer?

Accepted Answer

A)  A corporate officer cannot be removed by the board of directors. 
B)  A corporate officer has the express authority to bind a corporation to contracts. 
C)  A corporate officer is not liable on an unauthorized contract if the corporation does not ratify it. 
D)  A corporate officer is responsible for making policy decisions and employing the major officers for the corporation. 
A)  A corporate officer cannot be removed by the board of directors. 
B)  A corporate officer has the express authority to bind a corporation to contracts. 
C)  A corporate officer is not liable on an unauthorized contract if the corporation does not ratify it. 
D)  A corporate officer is responsible for making policy decisions and employing the major officers for the corporation.

Question 2

The written document authorizing a proxy is also called a proxy.

Accepted Answer

A) True 
 B)False

Question 3

The ________ Act of 2002 is a federal statute that establishes rules to improve corporate governance,prevent fraud,and add transparency to corporate operations.

Accepted Answer

A)  Sarbanes-Oxley 
B)  False Claims 
C)  Glass-Steagall 
D)  Lanham 
A)  Sarbanes-Oxley 
B)  False Claims 
C)  Glass-Steagall 
D)  Lanham

Question 4

A ________ is an agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else.

Accepted Answer

A)  proxy 
B)  buy-and-sell agreement 
C)  voting trust 
D)  right of right refusal 
A)  proxy 
B)  buy-and-sell agreement 
C)  voting trust 
D)  right of right refusal

Question 5

Dean,a director of a business consultancy firm,holds a meeting of the board of directors of the company.During the voting process over a critical issue,Dean unscrupulously casts two votes instead of the one that he is entitled to.Dean's conduct is an example of a ________.

Accepted Answer

A)  breach in the duty of obedience 
B)  denial of the right of refusal 
C)  piercing of the corporate veil 
D)  violation of the business judgment rule 
A)  breach in the duty of obedience 
B)  denial of the right of refusal 
C)  piercing of the corporate veil 
D)  violation of the business judgment rule

Question 6

A shareholder's only management duty is to vote on matters like the election of directors and the approval of fundamental changes in the corporation.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of shareholders?

Accepted Answer

A)  They own the corporation whose shares they also own. 
B)  They can bind the corporation that they own to contracts. 
C)  They are agents of the corporations they own. 
D)  They are directors of the corporations they own. 
A)  They own the corporation whose shares they also own. 
B)  They can bind the corporation that they own to contracts. 
C)  They are agents of the corporations they own. 
D)  They are directors of the corporations they own.

Question 8

Which of the following is true of straight voting?

Accepted Answer

A)  It gives a minority shareholder the advantage in electing the entire board of directors. 
B)  It allows shareholders to cast as many votes as the number of shares they own. 
C)  It requires a greater than majority of the shares to constitute a quorum of the vote of the shareholders. 
D)  It permits voters to procure votes equal to the product of the shares they own and the number of directors to be elected. 
A)  It gives a minority shareholder the advantage in electing the entire board of directors. 
B)  It allows shareholders to cast as many votes as the number of shares they own. 
C)  It requires a greater than majority of the shares to constitute a quorum of the vote of the shareholders. 
D)  It permits voters to procure votes equal to the product of the shares they own and the number of directors to be elected.

Question 9

According to the provisions set forth by the Sarbanes-Oxley Act,the ________ may issue an order prohibiting any person who has committed securities fraud from acting as an officer or a director of a public company.

Accepted Answer

A)  United States International Trade Commission 
B)  Federal Reserve System 
C)  Federal Communications Commission 
D)  Securities and Exchange Commission 
A)  United States International Trade Commission 
B)  Federal Reserve System 
C)  Federal Communications Commission 
D)  Securities and Exchange Commission

Question 10

Define duty of loyalty and its connection with the business judgment rule.

Accepted Answer

The duty of loyalty is a duty that direc

Question 11

When shareholders of a company wish to meet for the sole purpose of electing a board of directors,they will tend to hold a(n)________ shareholders' meeting.

Accepted Answer

A)  annual 
B)  special 
C)  emergency 
D)  extraordinary 
A)  annual 
B)  special 
C)  emergency 
D)  extraordinary

Question 12

Shareholders can bind the corporation to contracts.

Accepted Answer

A) True 
 B)False

Question 13

Anexwell Analytics is looking to strengthen its talent pool by recruiting subject matter experts who can help guide the company's growth.The company hires Kenneth,a data analytics professor from a private college,to serve on its board as a technology adviser.Which of the following roles has Kenneth adopted in the above scenario?

Accepted Answer

A)  outside director 
B)  ombudsman 
C)  corporate officer 
D)  corporate agent 
A)  outside director 
B)  ombudsman 
C)  corporate officer 
D)  corporate agent

Question 14

A derivative action is a(n)________.

Accepted Answer

A)  lawsuit that a shareholder brings against an offending party on behalf of a corporation 
B)  inquiry that the board of directors launches in order to analyze the ethical standards of the corporation 
C)  review that officers of the corporation conduct to test the skill sets of their subordinates 
D)  audit conducted by registered agents to examine the financial health of the corporation 
A)  lawsuit that a shareholder brings against an offending party on behalf of a corporation 
B)  inquiry that the board of directors launches in order to analyze the ethical standards of the corporation 
C)  review that officers of the corporation conduct to test the skill sets of their subordinates 
D)  audit conducted by registered agents to examine the financial health of the corporation

Question 15

Which of the following policies helps a corporate officer from being sued for honest mistakes made on behalf of a corporation?

Accepted Answer

A)  duty of loyalty 
B)  duty of obedience 
C)  business judgment rule 
D)  self-dealing 
A)  duty of loyalty 
B)  duty of obedience 
C)  business judgment rule 
D)  self-dealing

Question 16

Unless terms are staggered,the term of a director's office expires at the next ________ shareholders' meeting following his or her election.

Accepted Answer

A)  annual 
B)  special 
C)  emergency 
D)  extraordinary 
A)  annual 
B)  special 
C)  emergency 
D)  extraordinary

Question 17

Under the Sarbanes-Oxley Act,the chief executive officer (CEO)and chief financial officer (CFO)of a public company must file a statement accompanying each annual and quarterly report.

Accepted Answer

A) True 
 B)False

Question 18

A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit is known as a derivative action.

Accepted Answer

A) True 
 B)False

Question 19

A director or corporate officer who does not attend board meetings regularly would be in violation of ________.

Accepted Answer

A)  self-dealing 
B)  duty of care 
C)  the business judgment rule 
D)  the alter ego doctrine 
A)  self-dealing 
B)  duty of care 
C)  the business judgment rule 
D)  the alter ego doctrine

Question 20

A shareholder's ________ liability means that they are liable for the debts and obligations of the corporation only to the extent of their capital contribution.

Accepted Answer

A)  limited 
B)  product 
C)  manufacturer's 
D)  vicarious 
A)  limited 
B)  product 
C)  manufacturer's 
D)  vicarious

Exam 28: Corporate Governance and the Sarbanes-Oxley Act

Which of the following is true of a corporate officer?

The written document authorizing a proxy is also called a proxy.

The ________ Act of 2002 is a federal statute that establishes rules to improve corporate governance,prevent fraud,and add transparency to corporate operations.

A ________ is an agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else.

Dean,a director of a business consultancy firm,holds a meeting of the board of directors of the company.During the voting process over a critical issue,Dean unscrupulously casts two votes instead of the one that he is entitled to.Dean's conduct is an example of a ________.

A shareholder's only management duty is to vote on matters like the election of directors and the approval of fundamental changes in the corporation.

Which of the following is true of shareholders?

Which of the following is true of straight voting?

According to the provisions set forth by the Sarbanes-Oxley Act,the ________ may issue an order prohibiting any person who has committed securities fraud from acting as an officer or a director of a public company.

Define duty of loyalty and its connection with the business judgment rule.

When shareholders of a company wish to meet for the sole purpose of electing a board of directors,they will tend to hold a(n)________ shareholders' meeting.

Shareholders can bind the corporation to contracts.

A derivative action is a(n)________.

Which of the following policies helps a corporate officer from being sued for honest mistakes made on behalf of a corporation?

Unless terms are staggered,the term of a director's office expires at the next ________ shareholders' meeting following his or her election.

Under the Sarbanes-Oxley Act,the chief executive officer (CEO)and chief financial officer (CFO)of a public company must file a statement accompanying each annual and quarterly report.

A lawsuit a shareholder brings against an offending party on behalf of a corporation when the corporation fails to bring the lawsuit is known as a derivative action.

A director or corporate officer who does not attend board meetings regularly would be in violation of ________.

A shareholder's ________ liability means that they are liable for the debts and obligations of the corporation only to the extent of their capital contribution.

Legal Heritage and the Digital Age

Constitutional Law for Business and E-commerce

Courts and Jurisdiction

Judicial Alternative Administrative and E-Dispute Resolution

Intentional Torts and Negligence

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System and Electronic Financial Transactions

Credit, Real Property Financing, and Secured Transactions

Bankruptcy and Reorganization

Agency law

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchise and Special Forms of Business

Investor Protection, E-Securities, and Wall Street Reform

Antitrust Law and Unfair Trade Practices

Consumer Safety and Environmental Protection

Labor, Worker Protection, and Immigration Laws

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Duties and Liability

International and World Trade Law

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