Final B1 Flashcards
What is not an example of monitoring internal controls?
Increasing the reliability of financial reporting and compliance with applicable laws and regulations
What is the result of a contract in which a corporation enters with a director (conflict of interest)
Contract is void unless director makes full disclosure of facts to directors and shareholders
Define risk sharing?
Insuring against losses or entering into joint ventures to address risk.. “buying down” std deductibles
T/F: SOX requires mgmt report on IC to include a statement saying there were no disagreements between mgmt and auditor
false, idiot
What types of risk cannot be eliminated through a portfolio?
Non-diversifiable/Systematic risks
What s a type of risk that is inherent?
Business risk
What group is directly responsible for the implementation and development of the ERM framework?
Management of a company
What is the most effective means a company can do to avoid over hedging?
The company should acquire the minimum amount amount required to hedge known transactions
What is the imprisonment time for altering, destroying, covering up, or making false entry in an record or document?
20 years in prison
What is the primary purpose of monitoring internal controls?`
To address the change in risks
With SOX - what group of people must disclose whether or not have adopted the code of ethics?
The issuer’s senior financial officers, but not for other employee of the issuer
If the company were to hedge a risk, what type of risk response is that?
Reduction
