ABA Business Law & Ethics 3

Question 1

Under agency law, when a principal gives an agent authority to perform acts incidental to an expressly authorized transaction, this is called:

Accepted Answer

Implied authority

Answer

Implied authority arises from the express authority granted and encompasses acts reasonably necessary to accomplish the expressly authorized task.

Question 2

The Sarbanes-Oxley Act (SOX) Section 302 requires that corporate CEOs and CFOs do which of the following?

Accepted Answer

Personally certify the accuracy of financial reports

Answer

SOX Section 302 requires CEOs and CFOs to personally certify that financial statements fairly present the company's financial condition, exposing them to criminal liability for false certifications.

Question 3

Which of the following best describes 'disparate impact' discrimination?

Accepted Answer

A facially neutral policy that disproportionately harms a protected group

Answer

Disparate impact discrimination occurs when a neutral employment practice disproportionately excludes or disadvantages members of a protected class, even without discriminatory intent.

Question 4

Under the UCC, when a contract for the sale of goods does not specify a price, the courts will:

Accepted Answer

Set a reasonable price at the time of delivery

Answer

Under UCC § 2-305, if parties intend to contract but leave price open, the price is a reasonable price at the time of delivery.

Question 5

A corporation's board of directors has a fiduciary duty of loyalty, which primarily requires directors to:

Accepted Answer

Avoid conflicts of interest and act in the corporation's best interest

Answer

The duty of loyalty requires directors to put the corporation's interests ahead of their own personal interests and to disclose and manage conflicts of interest.

(ABA) Accredited Business Accountant Practice Test

(ABA) Accredited Business Accountant Practice Test

ABA Business Law & Ethics 3