ACT 6651 Ch 1
An issuer's annual report contains the following statements: I. Management and the external auditors have taken responsibility for establishing and maintaining an adequate system of internal control over financial reporting. II. COSO was the internal control framework used to design and assess the effectiveness of the internal control system. III. Management has assessed that internal control over financial reporting is effective. IV. An independent public accounting firm that is registered with the AICPA also assessed the system. Which of the above statements complies with the Sarbanes-Oxley Act of 2002? A. 1 and 2 only. B. 2 and 3 only. C. 1, 2 and 3 only. D. 1, 2, 3 and 4.
B. 2 and 3 only.
Which of the following scenarios will most likely violate the Sarbanes-Oxley Act of 2002? A. The financial expert on the audit committee is a former partner at a public accounting firm. B. An issuer compensated a director on the audit committee for providing consulting services regarding the purchase of real estate. C. A director on the audit committee is the former CEO. D. Only the CEO and CFO certify the annual report.
B. An issuer compensated a director on the audit committee for providing consulting services regarding the purchase of real estate.
According to the Sarbanes-Oxley Act of 2002, when an issuer's board of directors selects members to be on the company's audit committee, the board of directors must select individuals who A. Receive consulting fees, but not advisory fees, from the company. B. Are members of the company's board of directors. C. Are employed by the company in a financial management role. D. Are affiliated persons of the company's subsidiary.
B. Are members of the company's board of directors.
Which of the following documents would most likely contain specific rules for the management of a business corporation? A. Articles of incorporation. B. Bylaws. C. Certificate of authority. D. Shareholders' agreement.
B. Bylaws.
An issuer is preparing to file its annual report prior to adopting a code of ethics for its senior financial officers. What action, if any, must the issuer take to comply with the Sarbanes-Oxley Act of 2002? A. No action. B. Disclose in the annual report the lack of the code of ethics and the reason(s). C. File the annual report after adopting a code of ethics for senior financial officers. D. Adopt a code of ethics for senior financial officers within 60 days of filing.
B. Disclose in the annual report the lack of the code of ethics and the reason(s).
Seymore was recently invited to become a director of Buckley Industries, Inc. If Seymore accepts and becomes a director, Seymore, along with the other directors, will not be personally liable for A. Lack of reasonable care. B. Honest errors of judgment. C. Declaration of a dividend that the directors know will impair legal capital. D. Diversion of corporate opportunities to themselves.
B. Honest errors of judgment.
According to the Sarbanes-Oxley Act of 2002, which of the following statements is correct regarding an issuer's audit committee financial expert? A. The issuer's current outside CPA firm's audit partner must be the audit committee financial expert. B. If an issuer does not have an audit committee financial expert, the issuer must disclose the reason why the role is not filled. C. The issuer must fill the role with an individual who has experience in the issuer's industry. D. The audit committee financial expert must be the issuer's audit committee chairperson to enhance internal control.
B. If an issuer does not have an audit committee financial expert, the issuer must disclose the reason why the role is not filled.
The business judgment rule is a rule that immunizes corporate A. Management from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith but are not within the power of the corporation or the authority of management to make. B. Management from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith and are within both the power of the corporation and the authority of management to make. C. Shareholders from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith and are within both the power of the corporation and the authority of shareholders to make. D. Shareholders from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith but are not within the power of the corporation or the authority of shareholders to make.
B. Management from liability for actions that result in corporate losses or damages if the actions are undertaken in good faith and are within both the power of the corporation and the authority of management to make.
Which of the following is least likely to influence corporate governance? A. Code of ethics. B. Number of authorized shares of stock. C. Bylaws. D. Board of directors.
B. Number of authorized shares of stock.
Which of the following provisions must a for-profit corporation include in its articles of incorporation to obtain a corporate charter? Provision for the issuance of voting stock Name of the corporation A. I only. B. II only. C. Both I and II. D. Neither I nor II.
C. Both I and II.
The president of a company has signed a $10 million contract with a construction company to build a new corporate office. Which of the following corporate documents sets forth the scope of authority under which this transaction is governed? A. Certificate of incorporation. B. Charter. C. Bylaws. D. Proxy statement.
C. Bylaws.
Julie is the director of the audit committee at C corporation. Julie receives compensation from C corporation for her service on the board. C corporation's audit committee is responsible for appointing and compensating the independent auditor, who reports directly to management. Which of the following is true regarding C corporation's compliance with the Sarbanes-Oxley Act of 2002? A. C corporation is in compliance. B. C corporation is not in compliance because the audit committee should not be responsible for compensating the independent auditor. C. C corporation is not in compliance because the independent auditor should not report directly to management. D. C corporation is not in compliance because Julie should not be receiving compensation from C corporation for her service on the board.
C. C corporation is not in compliance because the independent auditor should not report directly to management.
Which of the following is necessary to be an audit committee financial expert according to the criteria specified in the Sarbanes-Oxley Act of 2002? A. A limited understanding of generally accepted auditing standards. B. Education and experience as a certified financial planner. C. Experience with internal accounting controls. D. Experience in the preparation of tax returns.
C. Experience with internal accounting controls.
Which of the following positions best describes the nature of the board of directors of XYZ Co.'s relationship to the company? A. Agent. B. Executive. C. Fiduciary. D. Representative.
C. Fiduciary.
Pursuant to the Sarbanes-Oxley Act of 2002, an accountant who destroys documents to impede an investigation by a U.S. agency can be A. Suspended or barred from being associated with a registered public accounting firm, or be required to end such association. B. Temporarily or permanently limited on the activities, functions, or operations conducted on behalf of a registered public accounting firm. C. Fined and/or imprisoned not more than 20 years. D. Fined and/or imprisoned not more than 10 years.
C. Fined and/or imprisoned not more than 20 years.
An issuer's CEO unknowingly certifies filings that do not meet the requirements of the Sarbanes-Oxley Act of 2002. The CEO may be subject to I. Fines II. Imprisonment III. Neither fines nor imprisonment because (s)he acted unknowingly A. I only. B. II only. C. I and II only. D. III only.
C. I and II only.
An issuer's audit committee has established procedures on submissions by employees of questionable accounting and auditing matters. Those procedures require the following: I. Employees shall identify themselves. II. All submissions will be presented to senior management. III. The internal audit activity will periodically monitor compliance with the procedures. Which of the above procedures will likely result in a violation of the Sarbanes-Oxley Act of 2002? A. I only. B. II only. C. I and II only. D. I, II and III.
C. I and II only.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established which of the following? Financial Stability Oversight Council Bureau of Consumer Financial Protection A. I only. B. II only. C. I and II. D. None of the answers are correct.
C. I and II.
An internal auditor is considering a client's organizational structure as it affects the ethical climate established by company management. Each of the following considerations is valid in this regard except A. The appropriateness of an entity's organizational structure depends in part on the nature of its activities. B. A highly structured organization with formal reporting lines may be appropriate regardless of entity size. C. A decentralized environment may increase the risk that unethical decisions could be made by unit managers. D. A company that is highly centralized will have a more diverse ethical culture than a company that is decentralized.
D. A company that is highly centralized will have a more diverse ethical culture than a company that is decentralized.
Which of the following situations most clearly illustrates a breach of fiduciary duty by one or more members of the board of directors of a corporation? A. A corporation previously has distributed 50% of its earnings as dividends. This year, it has annual earnings per share of $2, and the board of directors voted 4 to 1 against paying any dividend to finance growth. B. A director of a corporation who co-owns a computer vendor negotiated the purchase of a computer system by the corporation from the vendor, making a disclosure to the corporation and the other board members. The purchase price was competitive, and the board (absent the vendor co-owner) unanimously approved the purchase. C. Two directors of a corporation favor business expansion, two oppose it, and the fifth did not attend the meeting. During the five years that the fifth person has been a director, the individual did not attend two other meetings. D. A director who learned that the corporation is thinking of buying retail space in a city personally purchased a vacant building in the same city that would have been suitable for use by the corporation.
D. A director who learned that the corporation is thinking of buying retail space in a city personally purchased a vacant building in the same city that would have been suitable for use by the corporation.
A purpose of corporate governance includes which of the following? A. Satisfying the desires of stakeholders. B. Helping the corporation effectively and efficiently accomplish its objectives. C. Directing the actions of the corporation. D. All of the answers are correct.
D. All of the answers are correct.
Absent a specific provision in its articles of incorporation, a corporation's board of directors has the power to do all of the following except A. Repeal the bylaws. B. Declare dividends. C. Fix compensation of directors. D. Amend the articles of incorporation.
D. Amend the articles of incorporation.
The Sarbanes-Oxley Act of 2002 requires issuers to have an A. Annual financial audit. B. Annual SOX compliance audit. C. Independent board of directors. D. Audit committee.
D. Audit committee.
Who is required to make special certification statements regarding the establishment of internal control systems on Form 10-K? A. The principal executive officer, but not the principal financial officer. B. The principal financial officer, but not the principal executive officer. C. Neither the principal financial officer nor the principal executive officer. D. Both the principal executive officer and the principal financial officer.
D. Both the principal executive officer and the principal financial officer.
The principle that protects corporate directors from personal liability for acts performed in good faith on behalf of the corporation is known as the A. Clean hands doctrine. B. Full disclosure rule. C. Responsible person doctrine. D. Business judgment rule.
D. Business judgment rule.
A company officer who is not a director is authorized to perform which of the following duties? A. Terminate the company's external audit firm. B. Remove a director for failure to exercise reasonable supervision. C. Declare dividends to shareholders. D. Enter into a contract with a vendor of computers for the company.
D. Enter into a contract with a vendor of computers for the company.
According to the Sarbanes-Oxley Act of 2002, a chief executive officer or chief financial officer who misrepresents the company's finances may be penalized by being A. Fined but not imprisoned. B. Imprisoned but not fined. C. Removed from the corporate office and fined. D. Fined and imprisoned.
D. Fined and imprisoned.
Which of the following penalties may an issuer's CEO and CFO incur for violating the Sarbanes-Oxley Act of 2002? I. Forfeiture of bonus or other incentive-based compensation II. Prohibited from serving as an officer or director III. Forfeiture of profits received from the sale of the issuer's stock A. I only. B. I and II only. C. I and III only. D. I, II and III.
D. I, II and III.
A public accounting firm performs both audit and nonaudit services for an issuer. A violation of the Sarbanes-Oxley Act of 2002 occurs if I. The issuer's audit committee preapproves the nonaudit services. II. The issuer's audit committee preapproves the audit services. III. The issuer's board preapproves the nonaudit services. IV. The issuer's board preapproves the audit services. A. I only. B. II only. C. III only. D. III and IV only.
D. III and IV only.
The Financial Stability Oversight Council has a responsibility to do all of the following except A. Identify financial system risks. B. Comment to the SEC about accounting issues. C. Report annually to congress about financial market and regulatory matters. D. Inspect and investigate accounting firms.
D. Inspect and investigate accounting firms.
Who is responsible for designing, implementing, and maintaining internal control over financial reporting? A. Independent auditor. B. Internal auditor. C. Board of directors. D. Management.
D. Management.
In general, which of the following must be contained in articles of incorporation? A. Names of states in which the corporation will be doing business. B. Name of the state in which the corporation will maintain its principal place of business. C. Names of the initial officers and their terms of office. D. Number of shares of stock authorized to be issued by the corporation.
D. Number of shares of stock authorized to be issued by the corporation.
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented with a corporate opportunity? A. Reject the opportunity and not offer it to the corporation. B. Accept the opportunity and not offer it to the corporation. C. Accept the opportunity and disclose the acceptance to the corporation. D. Offer the opportunity to the corporation and accept it if the corporation rejects it.
D. Offer the opportunity to the corporation and accept it if the corporation rejects it.
When Congress passed the Sarbanes-Oxley Act of 2002, it imposed greater regulation on public companies and their auditors and required increased accountability. Which of the following is not a provision of the act? A. Certain executives must certify the fair presentation of the financial statements. B. Management must establish and document internal control procedures. C. The act created the Public Company Accounting Oversight Board (PCAOB). D. One of the company's officers may serve on the audit committee.
D. One of the company's officers may serve on the audit committee.
Which of the following is true regarding an issuer's compensation committee under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010? A. All committee members must be independent. B. A majority of committee members must be independent. C. At least one committee member must be on the audit committee. D. Committee advisers do not have to be disclosed.
A. All committee members must be independent.
Which of the following is most likely a violation of the rules of the Public Company Accounting Oversight Board (PCAOB)? A. An issuer's independent auditor also performs consulting work for the issuer on the design and operation of its internal controls. B. An issuer offers its common shares and preferred shares on different stock exchanges. C. An issuer's management is not independent of its board of directors. D. An issuer uses the same independent auditor in 2 consecutive years.
A. An issuer's independent auditor also performs consulting work for the issuer on the design and operation of its internal controls.
Under the Sarbanes-Oxley Act of 2002, A. At least one member of the audit committee must be a financial expert. B. The chairman of the board of directors must be a financial expert. C. The audit committee must rotate at least one seat on an annual basis. D. All members of the audit committee must be financial experts.
A. At least one member of the audit committee must be a financial expert.
Which of the following documents is a source of authority for directors and officers? A. Bylaws. B. Board minutes. C. Business judgment rule. D. Internal audit charter.
A. Bylaws.
Which provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 require an issuer to have a policy defining how to recover performance-based executive compensation? A. Clawback provisions. B. Whistleblower protection provisions. C. The provisions on aiding and abetting securities law violations. D. None of the answers are correct.
A. Clawback provisions.
Which of the following person(s) may bring a whistleblower claim under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010? I. An employee of the issuer II. An individual whose claim originates from information obtained while auditing the issuer III. An individual whose claim originates from information obtained while investigating the issuer A. I only. B. I and II only. C. I and III only. D. I, II, and III.
A. I only.
The board of directors performs all of the following duties except A. Managing day-to-day operations. B. Selection and removal of officers. C. Adding or repealing bylaws. D. Initiation of fundamental changes.
A. Managing day-to-day operations.
The Sarbanes-Oxley Act of 2002 established which of the following bodies to regulate the accounting profession? A. PCAOB. B. COSO. C. AICPA. D. SEC.
A. PCAOB.
Senior management can best promote an ethical culture within an organization by A. Setting an example of ethical conduct. B. Adopting a code of ethics. C. Providing the organization's code of ethics to every employee. D. Annually reviewing the organization's code of ethics.
A. Setting an example of ethical conduct.
Section 302 of the Sarbanes-Oxley Act of 2002 requires the CEO and CFO, in every annual or quarterly filing with the SEC, to certify all of the following except A. That they have taken every practical step to correct significant control deficiencies identified in the previous audit. B. That they have evaluated the effectiveness of the system of internal control. C. That they have taken responsibility for the system of internal control. D. That to the best of their knowledge, the financial statements are free of material misstatements.
A. That they have taken every practical step to correct significant control deficiencies identified in the previous audit.
A director of an automobile dealership is presented with an offer to purchase a competing dealership. The director presents the opportunity to the board of directors. The entire board rejects the opportunity, because the competitor's pending bankruptcy makes it an unattractive acquisition. Which of the following is true if the director accepts the competitor's offer? A. The director acted properly. B. The director breached a duty of loyalty. C. The director breached a duty of care. D. The director acted properly under the bankruptcy exception.
A. The director acted properly.
Under the reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002, the CEO and CFO must include a statement in the annual report to the effect that A. The system of internal control has been assessed by an independent public accounting firm that is registered with the PCAOB. B. The system of internal control has been assessed by an independent public accounting firm that is not currently the subject of any PCAOB investigation. C. The board of directors has taken responsibility for establishing and maintaining an adequate system of internal control over financial reporting. D. The issuer has used the COSO model to design and assess the effectiveness of its system of internal control.
A. The system of internal control has been assessed by an independent public accounting firm that is registered with the PCAOB.
An issuer's CEO and CFO certified the company's annual filing for Year 1 pursuant to the Sarbanes-Oxley Act of 2002. However, only the CEO certified the issuer's first quarterly filing for Year 2. The issuer has A. Violated SOX because the CFO did not certify the quarterly filing. B. Complied with SOX because only the CEO is required to certify quarterly filings. C. Complied with SOX because the CEO and CFO are only required to certify annual filings. D. Violated SOX because the issuer's Chief Audit Executive did not certify the annual filing.
A. Violated SOX because the CFO did not certify the quarterly filing.
An issuer's audit committee consists of its CEO and three outside board members. The issuer compensates the outside board members for their service on the board. Under the Sarbanes-Oxley Act of 2002, which of the following is a deficiency in the issuer's audit committee? A. Not enough audit committee members. B. The CEO is an audit committee member. C. All audit committee members are not officers in the corporation. D. The outside board members receive compensation for their service on the board.
B. The CEO is an audit committee member.
Which of the following statements is correct regarding the requirements of the Sarbanes-Oxley Act of 2002 for an issuer's board of directors? A. Each member of the board of directors must be independent from management influence, based on the member's prior and current activities, economic and family relationships, and other factors. B. The board of directors must have an audit committee entirely composed of members who are independent from management influence. C. The majority of members of the board of directors must be independent from management influence. D. The board of directors must have a compensation committee, a nominating committee, and an audit committee, each of which is entirely composed of independent members.
B. The board of directors must have an audit committee entirely composed of members who are independent from management influence.
The CEO is selected by and reports to A. The shareholders. B. The board of directors. C. Executive management. D. The audit committee.
B. The board of directors.
Which of the following actions is required to ensure the validity of a contract between a corporation and a director of the corporation? A. An independent appraiser must render to the board of directors a fairness opinion on the contract. B. The director must disclose the interest to the independent members of the board and refrain from voting. C. The shareholders must review and ratify the contract. D. The director must resign from the board of directors.
B. The director must disclose the interest to the independent members of the board and refrain from voting.
The audit committee of a publicly traded company (an issuer) is in the process of selecting the independent public accounting firm to conduct the annual financial statement audit. Which of the following is a requirement of the Sarbanes-Oxley Act of 2002 that the committee must consider when selecting an auditor? A. The firm must be registered with the stock exchange on which the issuer's shares are traded. B. The firm must be registered with the Public Company Accounting Oversight Board (PCAOB). C. The firm must be registered with the Securities and Exchange Commission (SEC). D. The firm must agree not to staff the audit with any former employees of the issuer.
B. The firm must be registered with the Public Company Accounting Oversight Board (PCAOB).
All of the directors on an issuer's audit committee are independent. However, none of the directors on the committee is a financial expert. The issuer disclosed this fact in its most recent annual filing. The issuer has complied with the Sarbanes-Oxley Act of 2002 if it also disclosed A. That it is required to have a financial expert on the audit committee. B. The reason(s) why its audit committee lacks a financial expert. C. The most recent financial expert on the audit committee. D. Its progress on appointing a financial expert to the audit committee.
B. The reason(s) why its audit committee lacks a financial expert.
Which of the following represents a violation of the Sarbanes-Oxley Act of 2002? I. An issuer's audit committee decides auditor compensation without board approval. II. An issuer's audit committee selects the independent auditor without board approval. III. An issuer's audit committee delegates to management the responsibility to oversee the work of the independent auditor. A. I and II only. B. II only. C. III only. D. None of the answers are correct.
C. III only.
Audit committee members of issuers are required, under the Sarbanes-Oxley Act of 2002, to maintain which of the following traits? A. Integrity. B. Diligence. C. Independence. D. Proficiency.
C. Independence.
Which of the following will most likely call into question the expertise of an audit committee's financial expert? A. Lack of understanding of generally accepted auditing standards. B. Lack of understanding of fraud examination techniques. C. Lack of experience with internal accounting controls. D. Lack of experience with performing business valuations.
C. Lack of experience with internal accounting controls.
Which of the following organizations was established by the Sarbanes-Oxley Act of 2002 to control the auditing profession? A. Information Systems Audit and Control Foundation (ISACF). B. IT Governance Institute (ITGI). C. Public Company Accounting Oversight Board (PCAOB). D. Committee of Sponsoring Organizations (COSO).
C. Public Company Accounting Oversight Board (PCAOB).
Davis, a director of Active Corp., is entitled to A. Serve on the board of a competing business. B. Take sole advantage of a business opportunity that would benefit Active. C. Rely on information provided by a corporate officer. D. Unilaterally grant a corporate loan to one of Active's shareholders.
C. Rely on information provided by a corporate officer.
The Sarbanes-Oxley Act of 2002 has strengthened auditor independence by requiring that management A. Engage auditors to report in accordance with the Foreign Corrupt Practices Act. B. Report the nature of disagreements with former auditors. C. Select auditors through audit committees. D. Hire a different CPA firm from the one that performs the audit to perform the company's tax work.
C. Select auditors through audit committees.
The Sarbanes-Oxley Act of 2002 imposes which of the following requirements? A. The board of directors must be composed entirely of independent shareholders. B. At least one member of the audit committee must be a former partner of the independent public accounting firm. C. The audit committee must be composed entirely of independent members of the board. D. Once the audit committee has selected the independent public accounting firm, the committee must not interfere with the firm's conduct of the financial statement audit.
C. The audit committee must be composed entirely of independent members of the board.
A member of the board of directors of Central Communications Co. is offered a license by a third party to operate a cellular phone system. The director does not present this offer to the board of directors for approval but informally mentions it to a fellow board member, who does not think it will be a problem. The director buys the license. Which of the following statements is correct regarding the director's actions? A. The director breached a duty of care by failing to use prudent business judgment. B. The director breached the duty of due diligence. C. The director breached a duty of loyalty by usurping a corporate opportunity. D. The director acted properly in purchasing the license.
C. The director breached a duty of loyalty by usurping a corporate opportunity.
An issuer's board of directors has unanimously approved the CEO's request for a personal loan from the issuer. Subsequently, the CEO used the loan proceeds to purchase additional shares of the issuer's stock. Under the Sarbanes-Oxley Act of 2002 (SOX), what is the most likely effect of the loan on the issuer? A. The issuer has not violated SOX because its board of directors unanimously approved the personal loan. B. The issuer has not violated SOX because the loan proceeds were used to purchase stock in the issuer. C. The issuer has violated SOX because it made a personal loan to an executive. D. None of the answers are correct.
C. The issuer has violated SOX because it made a personal loan to an executive.
An advantage of preferred shareholders over common shareholders is A. Greater voting rights. B. They contribute the basic capital for the corporation. C. The right to receive dividends and liquidation distributions first. D. None of the answers are correct.
C. The right to receive dividends and liquidation distributions first.
The Sarbanes-Oxley Act of 2002 requires management of publicly-traded corporations to do all of the following except A. Establish and document internal control procedures and to include in their annual reports a report on the company's internal control over financial reporting. B. Provide a report to include a statement of management's responsibility for internal control and of management's assessment of the effectiveness of internal control as of the end of the company's most recent fiscal year. C. Provide an identification of the framework used to evaluate the effectiveness of internal control (such as the COSO report), and a statement that the external auditor has issued an attestation report on management's assessment. D. Provide a statement that the board approves the choice of accounting methods and policies.
D. Provide a statement that the board approves the choice of accounting methods and policies.
Generally, a corporation's articles of incorporation must include all of the following except the A. Name of the corporation's registered agent. B. Name of each incorporator. C. Number of authorized shares. D. Quorum requirements.
D. Quorum requirements.
Which of the following corporate actions is subject to shareholder approval? A. Election of officers. B. Removal of officers. C. Declaration of cash dividends. D. Removal of directors.
D. Removal of directors.
The Sarbanes-Oxley Act of 2002 limits the nonaudit services that an audit firm can provide to public company audit clients. Which of the following is most likely to be a service that an auditor may provide to a public client? A. Internal audit outsourcing. B. Legal services. C. Bookkeeping services. D. Tax compliance services.
D. Tax compliance services.
Under the Sarbanes-Oxley Act of 2002, who is responsible for establishing procedures for the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, and auditing matters? A. Senior management. B. The board of directors. C. The internal auditors. D. The audit committee.
D. The audit committee.
Each of the following statements is correct regarding the existence and implementation of codes of conduct except A. Employees understand what behavior is acceptable or unacceptable and know what to do if they encounter improper behavior. B. The codes of conduct are comprehensive, addressing conflicts of interest, illegal or other improper payments, anticompetitive guidelines, and insider trading. C. The codes of conduct are periodically acknowledged by all employees. D. The codes of conduct must be in writing and displayed in public areas, such as a break room.
D. The codes of conduct must be in writing and displayed in public areas, such as a break room.
A corporate director commits a breach of duty if A. The director's exercise of care and skill is minimal. B. A contract is awarded by the company to an organization owned by the director. C. An interest in property is acquired by the director without prior approval of the board. D. The director's action, prompted by confidential information, results in an abuse of corporate opportunity.
D. The director's action, prompted by confidential information, results in an abuse of corporate opportunity.
According to the Sarbanes-Oxley Act of 2002, anyone who knowingly alters, destroys, covers up, or makes a false entry in any record or document with the intent to obstruct or influence the investigation of any matter within the jurisdiction of any department or agency of the United States may be fined and/or imprisoned for up to A. Five years. B. Ten years. C. Fifteen years. D. Twenty years.
D. Twenty years.
Knox, president of Quick Corp., contracted with Tine Office Supplies, Inc., to supply Quick's stationery on customary terms and at a cost less than that charged by any other supplier. Knox later informed Quick's board of directors that Knox was a majority shareholder in Tine. Quick's contract with Tine is A. Void because of Knox's self-dealing. B. Void because the disclosure was made after execution of the contract. C. Valid because of Knox's full disclosure. D. Valid because the contract is fair to Quick.
D. Valid because the contract is fair to Quick.
