Corporate Governance & Operations Management

Question 1

Board of Directors

Answer 1

no individual authority

fiduciary duty

Question 2

officers

Answer 2

individual agents
selected by the directors
ceo/cfo
not required to be a shareholder but may be

Question 3

SOX Act of 2002

Answer 3

corporate responsibility
enhanced financial disclosures
fraud

Question 4

Public Company Audit Committees

Answer 4

auditor reports directly to the audit committee
resolves disputes between auditor & mgmt
members of the issuer’s bod but otherwise independent

Question 5

section 404

Answer 5

assessment of internal control

Question 6

corporate and criminal fraud

Answer 6

up to 10-20 years in jail

Question 7

tempering with record or impending an official proceeding

Answer 7

not more than 20 yrs in prison

Question 8

COSO’s framework

Answer 8

an appropriate and comprehensive basis to document the assessment of internal controls over financial reporting

used by management/board and stockholders

Question 9

internal control

Answer 9

a process that is designed and implemented by an organization’s mgmt to provide reasonable assurance that it will achieve its compliance, operating, and reporting objectives

Question 10

Framework Objectives

Answer 10

ORC

operations objectives - efficiency of an entity’s operations

reporting objectives - reliability, timeliness, and transparency

compliance objectives - ensure the entity is adhering to all applicable laws and regulations

Question 11

Control Environment

Answer 11

Commitment to ethics and integrity
board independence and oversight
organizational structure
commitment to competence
accountability

Question 12

Risk Assessment

Answer 12

EAR
Specify Objectives
Identify and Analyze Risk
Consider Potential for Fraud
Identify and Asess Changes

Question 13

Info. and Communication

Answer 13

between internal and external parteners, fact

Question 14

Monitoring Activities

Answer 14

assessing the quality of IC performance over time, frequency of testing determined by risk

Question 15

Existing Control Activities

Answer 15

to mitigate risk, detective or preventative

Question 16

Effective Internal Control, Present Requirement

Answer 16

components and relevant principles are included in the design and implementation of the internal control system

Question 17

ERM

Answer 17

to assist organizations in developing a comprehensive response to risk mgmt

Question 18

ERM 4 Enterprise Objectives

Answer 18

Strategic - high level goals
operations - achieving objectives through effective and efficient use of resources
reporting - reliable and consistent reporting
compliance - compliance with laws and regulations

Question 19

ERM Components

Answer 19

IS EAR AIM

internal environment
setting objectives

event id
assessment of risk
risk response

activities control
info and comm.
monitoring

Question 20

Total Factor Productivity Ratios

Answer 20

output/total cost

Question 21

partial productivity ratios

Answer 21

output/specific quantity

Question 22

control chart

Answer 22

commonly used to determine zero defects & goal post conformance

Question 23

fishbone diagram

Answer 23

analyzes the source of potential problems & their location within a process

Question 24

pareto (histogram) diagram

Answer 24

displays the individual & cumulative frequency of quality issues, defects & programs

Question 25

cost objectives

Answer 25

resources or activities that serve as the basis for mgmt decisions Product Cost Income determination Efficiency

Question 26

Prime Costs

Answer 26

DM + DL

Question 27

Conversion Costs

Answer 27

DL + Factory OH

Question 28

Product Costs

Answer 28

inventoriable, not expensed until product sold dm + dl + mfg o/h applied

Question 29

Period costs

Answer 29

i/s only expensed in the period in which they are incurred, not inventoriable sg&a and interest (financing) expense

Question 30

Manufacturing Costs

Answer 30

product costs, direct and indirect costs

Question 31

Cost accounting system objectives

Answer 31

product costing (inventory & cogm) income determination (profitability) efficiency measurements (comparisons to std)

Question 32

traditional costing application of overhead

Answer 32

overhead rate= budgeted oh costs/ estimated cost driver applied overhead = actual cost driver x overhead rate cost driver = dl, doh, mh

Question 33

COGM

Answer 33

``` Beg. WIP +DM USED +DL +mfg OH applied = total mfg costs incurred -ending WIP =COGM ```

Question 34

COGS

Answer 34

``` Beg FG +COGM (net purchases) =COG avail for sale - Ending FG = COGS ```

Question 35

Job Order Costing

Answer 35

used when there are relatively few units produced, unique or easily identifiable

Question 36

FIFO

Answer 36

Beg WIP x % to be completed +Units started and completed - beg WIP +End WIP x % completed = equivalent units

Question 37

Weighted Average

Answer 37

Units completed & transferred out +End WIP x % completed = equivalent units

Question 38

cost driver

Answer 38

has the ability to change total costs, nonfinancial, statistical measurements of activities such as sales or productions are identified by ABC and are related to one of multiple cost pools for cost allocation

Question 39

Gross Profit

Answer 39

Sales - COGS

Question 40

COGS

Answer 40

beg. FG + COGM - end. FG = COGS