[Topic 1]

Question 1

The characteristic of being accountable in good governance means the ability to take responsibility for their actions and to answer to someone. In corporate governance, this means to answer to the BOD

Answer 1

FALSE

Question 2

Nicholas Nassim, finance professor, writer and former Wall Street trader coined the term “Black Swan Event” which means events which are impossible to predict due to their extreme rarity yet have catastrophic consequences.

Answer 2

FALSE

Question 3

A white swan event is a highly probable event that is predictable and carries an impact that can easily cascade. The COVID 19 pandemic is NOT a white swan event because it was highly certain to happen.

Answer 3

FALSE

Question 4

Governance is a system by which an organization is directed and controlled.

Answer 4

TRUE

Question 5

Governance exists in order to translate the wishes of the organization’s owners to organizational performance.

Answer 5

TRUE

Question 6

External auditors have the same function as the Internal auditors in that they review the financial statements and improve its integrity.

Answer 6

FALSE

Question 7

The BOD is responsible for the long-term strategic direction of the organization. Management is responsible for the short-term day-to-day implementation of these directions

Answer 7

TRUE

Question 8

Non-executive directors have the same role as other directors, but they have a different perspective.

Answer 8

TRUE

Question 9

The concept of efficiency in Corporate Governance includes the sustainable use of natural resources and the protection of the environment.

Answer 9

TRUE

Question 10

Safeguarding the integrity of the corporation in financial reporting speaks of a corporation’s accountability.

Answer 10

FALSE

Question 11

Management is responsible for establishing the Vision, Mission and Goals of the organization and cascading the same to the different stakeholders of the organization

Answer 11

FALSE

Question 12

Good governance principles are set and mandatory - following strict guidelines and controls in implementation, underpinned by consensus and continually developing notions of good practice

Answer 12

FALSE

Question 13

The audit committee practices its independence through the composition of its members who are non-executive directors and majority shareholders

Answer 13

FALSE

Question 14

The audit committee is directly accountable for top management who are obligated to issue regular monthly reports.

Answer 14

FALSE

Question 15

Governance exists to translate the wishes of an organization’s owners into organizational performance

Answer 15

TRUE

Question 16

There is only one employee hired by the BOD – the CEO.

Answer 16

TRUE

Question 17

In general, an organization or an institution is accountable to those who will be affected by its decisions or actions. Accountability is enforced separately from transparency and rule of law but is equally important

Answer 17

FALSE

Question 18

The promotion of ethical and responsible decision making supports the cost -control principle of corporate governance

Answer 18

FALSE

Question 19

Shareholders are responsible for full disclosure to other stakeholders as to financial and operating
performance.

Answer 19

FALSE

Question 20

Shareholders have a responsibility to provide financial reports and have the primary responsibility for the accuracy and completeness of an organization’s financial statements.

Answer 20

FALSE

Question 21

Good governance is a catalyst of improvement of a firm’s market value in that it has a positive perception that induces potential investors to decide to invest in a company

Answer 21

TRUE

Question 22

The External Auditor is responsible for ensuring the accuracy, timeliness of public reporting of financial and other information for public companies.

Answer 22

FALSE

Question 23

Managing an organization’s risks by establishing Risk Oversight and management and internal control is application of the corporate governance principle of transparency and full disclosure

Answer 23

FALSE

Question 24

Regulators are organizational stakeholders who are concerned with employees’ pension plans to ensure their good financial status upon retirement

Answer 24

FALSE

Question 25

The Internal and External Auditors report directly to the BOD en banc the results of their review of the company.

Answer 25

FALSE

Question 26

Governance starts with the shareholders/ owners delegating responsibilities to an elected board of directors to management and, in turn, to operating units with oversight and assistance from internal auditors.

Answer 26

TRUE

Question 27

It is important to recognize that management is part of the governance framework; management can influence who sits on the board and the audit committee as well as the othe r governance controls that might be put in place.

Answer 27

TRUE

Question 28

Employees have an interest in the quality of corporate governance because it has a relationship to economic performance and quality of financial reporting.

Answer 28

TRUE

Question 29

Good governance is a catalyst of improvement of a firm’s market value in that it has a positive perception that induces potential investors to decide to invest in a company.

Answer 29

TRUE

Question 30

Regulators are organizational stakeholders who are concerned with employees’ pension plans to ensure their good financial status upon retirement.

Answer 30

TRUE

Question 31

Governance exists to translate the wishes of an organization’s owners into organizational performance.

Answer 31

TRUE

Question 32

The Audit Committee practices its independence through the composition of its members who are Non -executive directors and majority shareholders

Answer 32

FALSE

Question 33

Non-executive directors have the same role as other directors, but they have a different perspective.

Answer 33

TRUE

Question 34

External auditors have the same function as the Internal auditors in that they review the financi al statements and improve its integrity.

Answer 34

FALSE

Question 35

Employees have an interest in the quality of corporate governance because it has a relationship to economic performance and quality of financial reporting.

Answer 35

TRUE

Question 36

Shareholders are responsible for full disclosure to other stakeholders as to financial and operating performance.

Answer 36

FALSE

Question 37

The BOD is responsible for the long-term strategic direction of the organization. Management is responsible for the short-term day-to-day implementaion of these directions

Answer 37

TRUE

Question 38

The promotion of ethical and responsible decision making supports the cost -control principle of corporate governance

Answer 38

FALSE

Question 39

Good governance principles are set and mandatory - following strict guidelines and controls in implementation, underpinned by consensus and continually developing notions of good practice

Answer 39

FALSE

Question 40

The audit committee is directly accountable for top managem ent who are obligated to issue regular monthly reports

Answer 40

FALSE

Question 41

Shareholders have a responsibility to provide financial reports and have the primary responsibility for the accuracy and completeness of an organization’s financial statements

Answer 41

TRUE

Question 42

Safeguarding the integrity of the corporation in financial reporting speaks of a corporation’s accountability

Answer 42

FALSE

Question 43

Managing an organization’s risks by establishing Risk Oversight and management and internal control is application of the corporate governance principle of transparency and full disclosure

Answer 43

FALSE

Question 44

The External Auditor is responsible for ensuring the accuracy, timeliness of public reporting of financial and other information for public companies

Answer 44

FALSE

Question 45

The Internal and External Auditors report directly to the BOD en banc the results of their review of the company

Answer 45

FALSE

Question 46

The concept of efficiency in Corporate Governance includes the sustainable use of natural resources and the protection of the environment

Answer 46

TRUE

Question 47

In general, an organization or an institution is accountable to those who will be affected by its decisions or actions. Accountability is enforced separately from transparency and rule of law but is equally important.

Answer 47

FALSE

Question 48

It is important to recognize that management is part of the governance framework; management can influence who sits on the board and the audit committee as well as the other governance controls that might be put in place.

Answer 48

TRUE

Question 49

Governance starts with the shareholders/ owners delegating responsibilities to an elected board of directors to management and, in turn, to operating units with oversight and assistance from internal auditors

Answer 49

TRUE

Question 50

Management is responsible for establishing the Vision, Mission and Goals of the organization and cascading the same to the different stakeholders of the organization.

Answer 50

FALSE

Question 51

Both Fraud and Error create misstatements in the financial statements that could lead stakeholders to make erroneous decisions

Answer 51

TRUE

Question 52

The difference between fraud and error is the intention.

Answer 52

TRUE

Question 53

There is an error triangle which aims to explain the occurrence of errors.

Answer 53

TRUE

Question 54

The Fraud Triangle elements must all exist, AT THE SAME TIME, for fraud to occur

Answer 54

TRUE

Question 55

All fraud is perpetuated by the employees

Answer 55

FALSE

Question 56

There is a type of Fraud that is called window dressing

Answer 56

TRUE

Question 57

There is a type of fraud that is called lapping

Answer 57

TRUE

Question 58

There is a type of fraud that is called kiting.

Answer 58

TRUE

Question 59

There is a type of fraud that is called balancing.

Answer 59

FALSE

Question 60

There is a type of fraud that is called padding

Answer 60

TRUE