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Flashcards in Becker Corporate Governance Deck (32):
1

Primary role of Board of Directors

Safeguard the company's assets and maximize shareholder return

2

What are fiduciary duties?

Duties to always act in the best interests of the corporation

3

Who can the board of directors rely on?

Corporate officers, employees, legal counsel, and accountants

4

What is the duty of loyalty?

Act in the best interest of the company

5

Who are officers selected by?

Directors

6

Are officers required to be shareholders?

No

7

What are the responsibilities of audit committees?

Responsible for the appointment, compensation, and oversight of the work of the public accounting firm

8

Who does the auditor report to?

Audit Committee

9

Who is responsible for resolving disputes between the auditor and management?

Audit Committee

10

Are issuers generally prohibited from making personal loans to directors or executive officers?

Yes

11

What percentage of ownership must be disclosed?

10%

12

What section of COSO refers to the assessment of internal controls?

404

13

When scheduling reviews, the SEC should consider?

Issued material restatements, significant volatility in their stock prices, largest market capitalization

14

How long must an auditor retain all workpapers?

7 years

15

What are the 3 framework objectives?

Operations, Reporting, and Compliance

16

What does operations objectives relate to?

Effectiveness and efficiency of an entity's operations

17

What does reporting objectives relate to?

Reliability, timeliness, and transparency

18

What does compliance objectives relate to?

Adhering to all applicable laws and regulations

19

What are the 5 components of internal control?

Control environment, Risk assessment, Information and Communication, Monitoring, Existing control activities

20

What are the 5 principles related to the control environment?

Ethics, Board Independence, Organizational structure, Commitment to Competence, and Accountability

21

What are the principles related to risk assessment?

Identify and analyze risks and consider potential for fraud

22

What is the principle for information and communication?

Relevant and high-quality information

23

What is monitoring?

Process of assessing the quality of internal control performance

24

What principles does existing control activities include?

Detective, preventative, and segregation of duties

25

What are the 2 words relevant to the 5 components of internal control?

Present and functioning

26

What process is designed to identify potential events and manage risk?

Enterprise risk management

27

What are the four categories in ERM?

Strategic, Operations, Reporting, and Compliance

28

What are the components of ERM?

Internal environment, setting objectives, event identification, assessment of risk, risk response, control activities, information and communication, and monitoring

29

What are the 8 key elements of internal environment?

Ethics, Board oversight, Organizational structure, Commitment to Competence, Accountability, HR

30

What type of risk requires no action?

Inherent risk

31

What type of risk exists after management takes action?

Residual risk

32

What qualities does effective information have?

Timely, Current, and Accurate