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BEC > Corporate Governance (M40) > Flashcards

Corporate Governance (M40) Flashcards

1
Q

Who has the power of selecting officers?

A

The board of directors of a corporation

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2
Q

Who has the power to declare dividends?

A

The board of directors of a corporation

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3
Q

Who has the power to determine management compensation?

A

The board of directors of a corporation

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4
Q

Who has the power to amend the Articles of Incorporation?

A

The shareholders of a corporation

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5
Q

T/F

Shareholders have a right to inspect the books and records

A

TRUE

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6
Q

T/F

Shareholders have a right to share in dividends if declared

A

TRUE

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7
Q

T/F

Shareholders have a right to sue on behalf of the corporation if the officers and directors fail to uphold corporate rights

A

TRUE

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8
Q

T/F

Shareholders have a right to determine the mission of the corporation

A

FALSE

The board of directors determines the mission of the corporation

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9
Q

Who determines the mission of the corporation?

A

The board of directors of a corporation

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10
Q

Who must give approval for appointing the CEO?

A

The board of directors of a corporation

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11
Q

Who must give approval for issuing a dividend?

A

The board of directors of a corporation

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12
Q

Who must give approval of the corporation strategic plan?

A

The board of directors of a corporation

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13
Q

Who must give approval to change the nature of the corporation

A

The stockholders of a corporation

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14
Q

T/F

A stockholder has a right to annual dividends declared and paid

A

FALSE

It is the decision of the board of directors whether or not to declare dividends

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15
Q

T/F

A stockholder has a right to vote for the election of officers

A

FALSE

Stockholders elect Directors (SD)
Directors elect Officers (DO)

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16
Q

T/F

Shareholders have a right to a reasonable inspection of corporate records

A

TRUE

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17
Q

T/F

Shareholders have the right to have the corporation issue a new class of stock

A

FALSE

18
Q

T/F

Stockholders have a right to manage their corporation even if they are not directors or officers

A

FALSE

Unless Stockholders are also directors or officers they have no right to manage their corporation

19
Q

T/F

Stockholders have a right to receive dividends

A

FALSE

It is the decision of the board of directors whether or not to declare dividends

20
Q

T/F

Stockholders have a right to inspect the books and records of their corporation

A

TRUE

21
Q

T/F

Stockholders have a right to get a list of their corporation’s customers to use for a business mailing list

A

FALSE

22
Q

T/F

Stockholders have a right to demand a list of shareholders for a proper purpose

A

TRUE

For example, stockholders have a right to demand a list of shareholders to help wage a proxy fight

23
Q

The purpose of the corporation is included in the ______ (bylaws/Articles of Incorporation)

A

Articles of Incorporation

24
Q

The number of authorized shares of stock is included in the ______ (bylaws/Articles of Incorporation)

A

Articles of Incorporation

25
Q

The procedure for electing directors is included in the ______ (bylaws/Articles of Incorporation)

A

Bylaws

26
Q

The powers of the corporation are included in the ______ (bylaws/Articles of Incorporation)

A

Articles of Incorporation

27
Q

The ________ is a legal rule that prevents directors from being held liable for making bad decisions if they act with good faith, loyalty, and due care

A

Business Judgment Rule

28
Q

T/F

The NYSE requires that a majority of directors on the corporate board are independent

A

TRUE

29
Q

T/F

The NYSE requires that a corporation adopt and make publicly available a code of conduct

A

TRUE

30
Q

T/F

The NYSE prohibits the CFO from serving on the board of directors

A

FALSE

31
Q

T/F

The NYSE requires that a corporation have an independent audit committee

A

TRUE

32
Q

T/F

SOX requires that at least one member of the audit committee should be independent

A

FALSE

ALL audit committee members should be independent

33
Q

T/F

SOX requires that at least one member of the audit committee should be the CFO of the company

A

FALSE

The CFO is not independent and therefore should not be on the audit committee

34
Q

T/F

SOX requires that at least one member of the audit committee should be a financial expert

A

TRUE

35
Q

T/F

SOX requires that at least one member of the audit committee should be a CPA

A

FALSE

While a CPA may generally qualify as a financial expert, a financial expert is not required to be a CPA

36
Q

What is the most effective external monitoring device for publicly held corporations?

A

External auditors

37
Q

In setting priorities for internal audit activities, the chief audit executive should use what approach?

A

A risk-based approach

38
Q

What are the three sections of the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing?

A

1) Performance Standards
2) Attribute Standards
3) Implementation Standards

39
Q

Which division of the SEC reviews corporate filings?

A

The Division of Corporate Finance

40
Q

Which division of the SEC advises the SEC on accounting and auditng matters and approves the rules of the PCAOB?

A

The Office of the Chief Accountant

41
Q

Which division of the SEC assists the SEC in executing its law enforcement function?

A

The Division of Enforcement

42
Q

What does the Division of Corporate Disclosure do for the SEC?

A

TRICK QUESTION

There is no Division of Corporate Disclosure for the SEC

BEC (17 decks)

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