Corporate Governance (M40) Flashcards Preview

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Flashcards in Corporate Governance (M40) Deck (42):
1

Who has the power of selecting officers?

The board of directors of a corporation

2

Who has the power to declare dividends?

The board of directors of a corporation

3

Who has the power to determine management compensation?

The board of directors of a corporation

4

Who has the power to amend the Articles of Incorporation?

The shareholders of a corporation

5

T/F

Shareholders have a right to inspect the books and records

TRUE

6

T/F

Shareholders have a right to share in dividends if declared

TRUE

7

T/F

Shareholders have a right to sue on behalf of the corporation if the officers and directors fail to uphold corporate rights

TRUE

8

T/F

Shareholders have a right to determine the mission of the corporation

FALSE

The board of directors determines the mission of the corporation

9

Who determines the mission of the corporation?

The board of directors of a corporation

10

Who must give approval for appointing the CEO?

The board of directors of a corporation

11

Who must give approval for issuing a dividend?

The board of directors of a corporation

12

Who must give approval of the corporation strategic plan?

The board of directors of a corporation

13

Who must give approval to change the nature of the corporation

The stockholders of a corporation

14

T/F

A stockholder has a right to annual dividends declared and paid

FALSE

It is the decision of the board of directors whether or not to declare dividends

15

T/F

A stockholder has a right to vote for the election of officers

FALSE

Stockholders elect Directors (SD)
Directors elect Officers (DO)

16

T/F

Shareholders have a right to a reasonable inspection of corporate records

TRUE

17

T/F

Shareholders have the right to have the corporation issue a new class of stock

FALSE

18

T/F

Stockholders have a right to manage their corporation even if they are not directors or officers

FALSE

Unless Stockholders are also directors or officers they have no right to manage their corporation

19

T/F

Stockholders have a right to receive dividends

FALSE

It is the decision of the board of directors whether or not to declare dividends

20

T/F

Stockholders have a right to inspect the books and records of their corporation

TRUE

21

T/F

Stockholders have a right to get a list of their corporation's customers to use for a business mailing list

FALSE

22

T/F

Stockholders have a right to demand a list of shareholders for a proper purpose

TRUE

For example, stockholders have a right to demand a list of shareholders to help wage a proxy fight

23

The purpose of the corporation is included in the ______ (bylaws/Articles of Incorporation)

Articles of Incorporation

24

The number of authorized shares of stock is included in the ______ (bylaws/Articles of Incorporation)

Articles of Incorporation

25

The procedure for electing directors is included in the ______ (bylaws/Articles of Incorporation)

Bylaws

26

The powers of the corporation are included in the ______ (bylaws/Articles of Incorporation)

Articles of Incorporation

27

The ________ is a legal rule that prevents directors from being held liable for making bad decisions if they act with good faith, loyalty, and due care

Business Judgment Rule

28

T/F

The NYSE requires that a majority of directors on the corporate board are independent

TRUE

29

T/F

The NYSE requires that a corporation adopt and make publicly available a code of conduct

TRUE

30

T/F

The NYSE prohibits the CFO from serving on the board of directors

FALSE

31

T/F

The NYSE requires that a corporation have an independent audit committee

TRUE

32

T/F

SOX requires that at least one member of the audit committee should be independent

FALSE

ALL audit committee members should be independent

33

T/F

SOX requires that at least one member of the audit committee should be the CFO of the company

FALSE

The CFO is not independent and therefore should not be on the audit committee

34

T/F

SOX requires that at least one member of the audit committee should be a financial expert

TRUE

35

T/F

SOX requires that at least one member of the audit committee should be a CPA

FALSE

While a CPA may generally qualify as a financial expert, a financial expert is not required to be a CPA

36

What is the most effective external monitoring device for publicly held corporations?

External auditors

37

In setting priorities for internal audit activities, the chief audit executive should use what approach?

A risk-based approach

38

What are the three sections of the Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing?

1) Performance Standards
2) Attribute Standards
3) Implementation Standards

39

Which division of the SEC reviews corporate filings?

The Division of Corporate Finance

40

Which division of the SEC advises the SEC on accounting and auditng matters and approves the rules of the PCAOB?

The Office of the Chief Accountant

41

Which division of the SEC assists the SEC in executing its law enforcement function?

The Division of Enforcement

42

What does the Division of Corporate Disclosure do for the SEC?

TRICK QUESTION

There is no Division of Corporate Disclosure for the SEC