Chapter 1 - The role of treasury management

For publicly traded companies on a US stock exchange, who does SOX make personally responsible for financial statement accuracy? a. Treasurer b. Chief financial officer (CFO) c. Controller d. All of the above

b. Chief financial officer (CFO)

"EML Inc., which has $600 million in outstanding debt, is preparing to issue commercial paper in excess of $100 million within the next six months. The new assistant treasurer has recently spent time getting to know the issuing and paying agent, the rating agency analyst, and the legal counsel, and has been following the financial markets. What is this is an example of? " a. Benchmarking with peers b. External collaboration d. Decentralized control d. Risk transfer

b. External collaboration

The items listed below are some of the primary treasurer responsibilities. What is another of these responsibilities? - Treasury strategy, policies - Daily liquidity and cash - Short- and long-term investing - External financing - Relationships - Payments - reporting/compliance oversight a. Credit and A/R b. Financial risk management c. Tax management and reporting d. Investor relations

b. Financial risk management

Checks and balances with regards to treasury activities are important because a. Treasurers have a certification that must be upheld b. Treasurers deal with the cash of the company in all aspects c. The auditors will review all treasury activities and ensure ethical behavior d. Ethics are actually not paramount for treasury staff

b. Treasurers deal with the cash of the company in all aspects

The items listed below are some of the major objectives of treasury management. What is another of these objectives? - Maintain liquidity - Maintain access to short-, medium-, and - - long-term financing - Manage investments - Manage risk - Manage information and technology - Collaborate internally and manage external parties a. Prioritize investments for profit b. Perform financial planning and analysis c. Optimize cash resources d. Set organizational strategy.

c. Optimize cash resources

The MOST common way that companies structure their treasury operations is as a(n): a. Cost center b. Profit center c. Shared service center d. In-house bank

a. Cost center

"In order to be defined as independent, a corporate director:" a. Cannot have owned preferred stock shares in the company b. Cannot have a material relationship with the company c. Cannot meet regularly with executive management outside of board meetings d. Cannot have been an employee with the company during the past three years

b. Cannot have a material relationship with the company

When and why is treasury set up as a cost center versus a profit center? a. Cost centers are less common b. In a profit center, treasury is seen as a support function c. Cost centers are common in global finance, trade, or risk management d. Profit center income is from trading and hedging/speculative activities

Profit center income is from trading and hedging/speculative activities

A main characteristic of a company with regional offices sign a centralized treasury functions is a. High level of control b. Increased borrowing costs c. Centrally determined depository accounts d. Increased operating costs

a. High level of control

The items listed below are some of the reasons for the popularity of SSCs. What is another of these reasons? - Internal service provider/vendor - Less duplication - Standardized processes - Quality and timeliness - Strategic flexibility - Internal controls a. Shared funding and management b. Familiarity with local laws, customs c. Only one site for entire global firm d. Never treated as a vendor

a. Shared funding and management