Auditing 20-40

Question 1

20.

is the primary objective of corporate governance.

a) a) Maximizing profits for shareholders

b) b) Ensuring compliance with legal regulations

c) c) Promoting ethical behavior within the organization

d) d) Enhancing shareholder value while protecting stakeholders’ interests

Answer 1

D

Question 2

21. are the primary stakeholders in corporate governance.

a) a) Shareholders, customers, and suppliers

b) b) Employees, customers, and competitors

c) c) Shareholders, management, and the board of directors

d) d) Management, government, and regulators

Answer 2

C

Question 3

22. is the role of the board of directors in corporate governance.

a) a) Implementing day-to-day business operations

b) b) Representing the interests of employees in decision-making

c) c) Overseeing the company’s management and setting strategic direction

d) d) Negotiating contracts with suppliers and customers Answer

Answer 3

C

Question 4

23. is the purpose of an audit committee in corporate governance.

a) a) Handling customer complaints and inquiries

b) b) Evaluating the performance of the board of directors

c) c) Reviewing financial statements and ensuring financial reporting integrity

d) d) Developing marketing campaigns and promotional activities

Answer 4

C

Question 5

24. is the principle of corporate governance emphasizes treating all shareholders fairly and equitably.

a) Transparency

b) Independence

c) Accountability

d) Fairness

Answer 5

D

Question 6

25. What is the significance of corporate governance for a company?

a) It ensures that the company’s employees are well-compensated.

b) It guarantees the company’s profitability and market leadership.

c) It fosters investor confidence and protects the company’s reputation

d) It enables the company to avoid taxation and regulatory requirements.

Answer 6

C

Question 7

26. is the role of executive compensation in corporate governance.

a) It ensures that employees are rewarded for their loyalty.

b) It aligns the interests of executives with shareholders and company performance.

c) It helps the company minimi3/12es and increase profits.

d) It encourages employees to adopt unethical practices to achieve higher compensation.

Answer 7

B

Question 8

27. is the primary purpose of a professional code of ethics.

a) To ensure employees are well-compensated

b) To maintain the company’s profitability

c) To provide guidance for ethical decision-making

d) To promote competition among professionals

Answer 8

C

Question 9

28. is the fundamental principle of ACCA’s Code of Ethics and Conduct.

a) Integrity

b) Profit maximization

c) Market domination

d) Conflict of interest

Answer 9

A

Question 10

29. ACCA’s Code of Ethics and Conduct applies to:

a) Only ACCA members and affiliates

b) All accountants worldwide

c) Employees of ACCA-accredited companies

d) Non-profit organizations

Answer 10

A

Question 11

30. Which of the following is an example of a threat to compliance with the fundamental principle of “Objectivity” in ACCA’s Code of Ethics and Conduct?

a) Independence of mind and appearance

b) Continuing professional development

c) Honesty and fair dealing

d) Close family relationships

Answer 11

D

Question 12

31. The principle of “Confidentiality” in ACCA’s requires members to: Code of Ethics and Conduct

a) Share confidential information with stakeholders for transparency

b) Maintain confidentiality of client information unless required by law or with the client’s permission

c) Disclose all confidential information to the media for public interest

d) Use confidential information for personal gain

Answer 12

B

Question 13

32. Which fundamental principle of ACCA’s Code of Ethics and Conduct emphasizes the need to avoid any actions that may discredit the profession?

a) Professional competence and due care

b) Confidentiality

c) Professional behaviour

d) Integrity

Answer 13

C

Question 14

33. What should an ACCA member do if they become aware of a breach of the Code of Ethics and Conduct by another member?

a) Ignore the situation as it is not their responsibility

b) Report the matter to the appropriate authority within ACCA

c) Confront the member directly to resolve the issue

d) Post the issue on social media to raise awareness

Answer 14

B

Question 15

34. ACCA’s Code of Ethics and Conduct requires members to:

a) Prioritize their personal interests above the interests of clients and employers

b) Act with integrity and avoid any actions that may discredit the profession

c) Only serve clients and employers who offer high compensation

d) Share confidential information with competitors to maintain market balance

Answer 15

B

Question 16

35. is the primary purpose of an internal audit function in an organization.

a) To identify potential fraud within the organization

b) To evaluate and improve internal processes and controls

c) To oversee the external auditors’ work

d) To manage the company’s financial investments

Answer 16

B

Question 17

36. What is the main difference between internal audit and external audit?

a) Internal audit focuses on financial statements, while external audit focuses on operational processes.

b) Internal audit is performed by the organization’s internal audit team, while external audit is conducted by a third-party firm.

c) internal audit is required by law, while external audit is optional.

d) Internal audit is conducted annually, while external audit is carried out on an ad-hoc basis.

Answer 17

B

Question 18

37. Who does the internal auditor report to within the organization?

a) The Chief Financial Officer (CFO)

b) The Chief Executive Officer (CEO)

c) The Board of Directors or the Audit Committee

d) The external auditors

Answer 18

C

Question 19

38. What is the focus of the internal audit function regarding corporate governance?

a) Ensuring the company complies with tax regulations

b) Evaluating the performance of the Board of Directors

c) Ensuring that the company’s management is effective

d) Evaluating the company’s marketing strategies

Answer 19

C

Question 20

39. Which of the following is NOT a typical objective of internal audit?

a) Assessing the efficiency and effectiveness of operations

b) Reviewing the accuracy of the financial statements

c) Evaluating the company’s compliance with laws and regulations

d) Managing the company’s financial investments

Answer 20

D