Question 1

Which of the following statements regarding audit committees is incorrect?

Accepted Answer

A)  Audit committees review internal control procedures. 
B)  Audit committees oversee the appointment and relationship of the external auditor. 
C)  Audit committees oversee the appointment of the internal and external auditors. 
D)  Audit committee members must be employees of the company. 
A)  Audit committees review internal control procedures. 
B)  Audit committees oversee the appointment and relationship of the external auditor. 
C)  Audit committees oversee the appointment of the internal and external auditors. 
D)  Audit committee members must be employees of the company.

Question 2

Which of the following recommendations are not associated with the principles of good corporate governance issued by the ASX Corporate Governance Council?

Accepted Answer

A)  A board of directors should have a majority of independent directors. 
B)  The CEO should not be the chairman. 
C)  There should be a separate nominations and remuneration committee for directors. 
D)  All audit committee members should be accountants. 
A)  A board of directors should have a majority of independent directors. 
B)  The CEO should not be the chairman. 
C)  There should be a separate nominations and remuneration committee for directors. 
D)  All audit committee members should be accountants.

Question 3

Which of the following factors could weaken corporate governance?

Accepted Answer

A)  The appointment of independent directors to the audit committee 
B)  Stipulating the maximum number of directorships a director can commit to 
C)  Ensuring that the rotation of directors is such that the average incumbency ensures that all directors are appointed for a long period so as to enhance their familiarity with the company's policies and procedures 
D)  Ensuring the CEO is not the chairman of the board of directors 
A)  The appointment of independent directors to the audit committee 
B)  Stipulating the maximum number of directorships a director can commit to 
C)  Ensuring that the rotation of directors is such that the average incumbency ensures that all directors are appointed for a long period so as to enhance their familiarity with the company's policies and procedures 
D)  Ensuring the CEO is not the chairman of the board of directors

Question 4

According to Josephson (1992), people do not behave in an ethical manner because of:

Accepted Answer

A)  faulty reasoning and loyalty. 
B)  self-righteousness and greed. 
C)  self-deception and fidelity. 
D)  self-protection and faulty reasoning. 
A)  faulty reasoning and loyalty. 
B)  self-righteousness and greed. 
C)  self-deception and fidelity. 
D)  self-protection and faulty reasoning.

Question 5

External corporate governance refers to:

Accepted Answer

A)  the board of directors. 
B)  the audit committee. 
C)  the discipline of the market place. 
D)  triple bottom line reporting. 
A)  the board of directors. 
B)  the audit committee. 
C)  the discipline of the market place. 
D)  triple bottom line reporting.

Question 6

Corporate governance is a new phenomenon that has grown out of recent corporate collapses.

Accepted Answer

A) True 
 B)False

Question 7

Discuss the role of the board of directors in Australia and the key issues discussed in the literature about the board of directors impacting its effectiveness.

Accepted Answer

Role of the board: to represent and crea

Question 8

The ASX principles and recommendations are mandatory on the top 200 listed companies.

Accepted Answer

A) True 
 B)False

Question 9

In October 2002, Duke Power, the regulated electricity utility of the United States (US) corporation Duke Energy, agreed to pay $25 million to its customers to settle allegations by regulators in North and South Carolina that it had underreported net earnings by about $123 million between 1998 and 2002. The underreporting of net earnings by Duke Energy was allegedly undertaken in order to avoid having to cut its electricity rates.
Required:
Evaluate the actions of Duke Energy's management, which led to the underreporting of net earnings described in case study 1 above, from the perspective of ethical behaviour.

Accepted Answer

Issues which may be

Question 10

According to Josephson (1992), characteristics of an ethical person include:

Accepted Answer

A)  honesty, caring and listening to clients' orders. 
B)  promise-keeping, not listening to client's orders and respectfulness. 
C)  loyalty, fairness and caring. 
D)  honesty, coolness and being smart. 
A)  honesty, caring and listening to clients' orders. 
B)  promise-keeping, not listening to client's orders and respectfulness. 
C)  loyalty, fairness and caring. 
D)  honesty, coolness and being smart.

Question 11

The majority of studies on board composition and firm performance and risk show that an increase in the number of independent directors on a board will:

Accepted Answer

A)  reduce the financial performance of a form. 
B)  increase the financial performance of a firm. 
C)  have no impact on the financial performance of a firm. 
D)  increase the risk of a firm. 
A)  reduce the financial performance of a form. 
B)  increase the financial performance of a firm. 
C)  have no impact on the financial performance of a firm. 
D)  increase the risk of a firm.

Question 12

Corporate governance includes mechanisms, such as the board of directors, which exist to provide some assurance to equity investors that the management of a company is being held accountable for their actions, thus minimising agency costs.

Accepted Answer

A) True 
 B)False

Question 13

A company is classified as a separate legal entity, which often gives rise to a separation of powers, which in turn is a primary reason for ensuring there are effective corporate governance systems in place.

Accepted Answer

A) True 
 B)False

Which of the following statements regarding audit committees is incorrect?

Which of the following recommendations are not associated with the principles of good corporate governance issued by the ASX Corporate Governance Council?

Which of the following factors could weaken corporate governance?

According to Josephson (1992), people do not behave in an ethical manner because of:

External corporate governance refers to:

Corporate governance is a new phenomenon that has grown out of recent corporate collapses.

Discuss the role of the board of directors in Australia and the key issues discussed in the literature about the board of directors impacting its effectiveness.

The ASX principles and recommendations are mandatory on the top 200 listed companies.

According to Josephson (1992), characteristics of an ethical person include:

The majority of studies on board composition and firm performance and risk show that an increase in the number of independent directors on a board will:

Corporate governance includes mechanisms, such as the board of directors, which exist to provide some assurance to equity investors that the management of a company is being held accountable for their actions, thus minimising agency costs.

A company is classified as a separate legal entity, which often gives rise to a separation of powers, which in turn is a primary reason for ensuring there are effective corporate governance systems in place.

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters

Exam 3: Ethics and Corporate Governance

Which of the following statements regarding audit committees is incorrect?

Which of the following recommendations are not associated with the principles of good corporate governance issued by the ASX Corporate Governance Council?

Which of the following factors could weaken corporate governance?

According to Josephson (1992), people do not behave in an ethical manner because of:

External corporate governance refers to:

Corporate governance is a new phenomenon that has grown out of recent corporate collapses.

Discuss the role of the board of directors in Australia and the key issues discussed in the literature about the board of directors impacting its effectiveness.

The ASX principles and recommendations are mandatory on the top 200 listed companies.

According to Josephson (1992), characteristics of an ethical person include:

The majority of studies on board composition and firm performance and risk show that an increase in the number of independent directors on a board will:

Corporate governance includes mechanisms, such as the board of directors, which exist to provide some assurance to equity investors that the management of a company is being held accountable for their actions, thus minimising agency costs.

A company is classified as a separate legal entity, which often gives rise to a separation of powers, which in turn is a primary reason for ensuring there are effective corporate governance systems in place.

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters