CCM Corporate Governance and Ethical Standards 2

Question 1

Which board committee is primarily responsible for overseeing financial reporting integrity and external auditor relationships?

Accepted Answer

Audit Committee

Answer

The Audit Committee oversees financial reporting, internal controls, and the relationship with external auditors.

Question 2

Under the Sarbanes-Oxley Act, what is the maximum prison term for securities fraud?

Accepted Answer

20 years

Answer

SOX Section 1348 establishes a maximum 20-year prison sentence for securities fraud.

Question 3

What governance principle requires that board members act in the best interests of shareholders rather than personal gain?

Accepted Answer

Duty of Loyalty

Answer

The Duty of Loyalty requires directors to prioritize shareholder interests over personal interests and avoid conflicts.

Question 4

A company's code of conduct should be reviewed and updated at minimum how often according to best practices?

Accepted Answer

Annually

Answer

Best practice is annual review of the code of conduct to ensure alignment with current laws, regulations, and business practices.

Question 5

Which governance structure separates the roles of CEO and Board Chair to reduce concentration of power?

Accepted Answer

Non-executive chair model

Answer

A non-executive (independent) chair model separates leadership of the board from management, reducing power concentration.

(CCM) Certified Compliance Manager Practice Test