Governance Test Questions

UNIVERSIDAD DE ZAMBONGA- Ipil Campus Bachelor of Science in Accountancy Academic Year 2019-2020 – 2nd Semester PRE-MID EXAMINATION GOVERNANCE, RISK MANAGEMENT, Name: _________________________________________ Year and Section: _____________________________

Date: _______________________ Score: ______________________

“ Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential. – John Maxwell”

TEST – I. MULTIPLE CHOICE. Encircle Choose the letter of the correct answer. 2. What is meant by the 'separation of ownership and control?' a) That the owners of companies have become separated from those who control companies. b) That the law should seek to keep the owners and controllers of company apart in order to avoid an overconcentration of power. c) That owners and controllers of companies should not act in concert to defeat resolutions. d) That those who control the company should be separate to those who own it. 3. Which one of the following statements is true? a) Conflicts of interests between management and stakeholders can result in bankruptcies or major frauds. b) The management board approves the mission, vision, objectives and strategy of the entity. c) Corporate governance addresses the principal–agent relationship between management and directors on the one hand and the relationship between the company and suppliers on the other. d) It is the responsibility of internal audit to design and monitor controls that reasonably assure that objectives are met. 4. Which of the following is not something performed by the company’s board? a) Oversees management and ensures the quality of information provided to shareholders and to financial markets through the financial statements. b) Day to day supervision of the sales manager. c) Defines the company’s strategy. d) Appoints the corporate officers responsible for managing the company and implementing this strategy. 5. The Sarbanes–Oxley Act requires that executive officers attest to all the following except: a) The statements fairly present the company’s financial condition. b) Based on their knowledge there are no untrue statements or omissions of material fact. c) All deficiencies in internal control or any fraud has been disclosed to regulators. d) Their conclusions about effectiveness of internal control. 6. A board member is independent when: a) She represents the shareholders – not other constituencies. b) She has no relationship of any kind whatsoever with the corporation, its group or the management of either that is such as to color her judgment. c) She is a top executive of the company supervised. d) She is a family member of the CEO. 7. According to agency theory: a) Information asymmetry does not exist. b) The management board is the principal. c) The management board is the agent. d) Self-interest plays no role. 8. Sustainability reporting consists of: a) Social and environmental issues. b) Economic issues. c) Economic, social and environmental issues. d) Environmental issues. 9. The primary stakeholders are:a.Customers.b.Suppliers.c.Shareholders.d.Creditors. PREPARED BY:

REVIEWED BY:

APPROVED BY:

CHRISTINE H. LEAL Instructor

NEMIA B. HULAGNO, MBA Program Chairperson, BSA & BSBA

GERALDINE R. TABLATE, ED.D School Administrator