Corporate Governance 2

Question 1

NYSE Director Independence rules state that a director is not independent if

Answer 1

former partner of external audit firm with last 5 years

employed by the corporation in the last 5 years

received $120,000 in payments (not including compensation for serving on the board) from the corporation in a 12-month period in the last 3 years

Question 2

What are some examples that the NYSE Requires from corporations listed on the NYSE

Answer 2

External auditors must report directly to the audit committee of the board of directors

One member of the audit committee of the board of directors must be a financial expert

The principle executive officer must disclose all significant internal control deficiencies

Question 3

Auditing Standards divide internal control into five interrelated components which are

Answer 3

(1) control environment,
(2) risk assessment,
(3) control activities,
(4) information and communication, and
(5) monitoring.

Question 4

Some Limitations of ERM are

Answer 4

Risk relates to the future that is uncertain

Collusion among two or more individuals can result in enterprise risk management failure

Enterprise risk management is subject to management override

Question 5

the chief audit executive establishing a risk-based approach to determine audit priorities

Answer 5

Is required by the IIA Standards

Question 6

According to COSO a manager within the department

Answer 6

is best suited, as part of the enterprise risk management process, to devise and execute risk procedures for a particular department

Question 7

individuals that monitor internal controls

Answer 7

are called Evaluators according to COSO

Question 8

An employee who Prepare disbursement vouchers and sign checks

Answer 8

should no be able to do if proper internal controls are in place

Question 9

One example of a company sharing the risk

Answer 9

Is Purchasing insurance

Question 10

subset of Operations is an example of

Answer 10

Safeguarding Assets