CEA Corporate Governance & Compliance 2

Question 1

Which board committee is primarily responsible for overseeing a company's financial reporting and internal controls?

Accepted Answer

Audit Committee

Answer

The Audit Committee oversees financial reporting integrity, internal controls, and the external audit process.

Question 2

A publicly traded U.S. company must disclose material information to all investors simultaneously under which regulation?

Accepted Answer

Regulation Fair Disclosure (Reg FD)

Answer

Regulation Fair Disclosure (Reg FD) requires companies to disclose material information to all investors at the same time, preventing selective disclosure.

Question 3

What is 'say on pay' as established by the Dodd-Frank Act?

Accepted Answer

A shareholder advisory vote on executive compensation

Answer

'Say on pay' gives shareholders a non-binding advisory vote on executive compensation packages at least once every three years.

Question 4

Under the Foreign Corrupt Practices Act (FCPA), which of the following is a recognized exception to the anti-bribery provisions?

Accepted Answer

Facilitating payments to expedite routine governmental actions

Answer

The FCPA includes a narrow exception for facilitating or 'grease' payments made to expedite routine non-discretionary government actions such as processing permits.

Question 5

Which principle requires that board directors avoid situations where their personal interests conflict with the interests of the corporation?

Accepted Answer

Duty of Loyalty

Answer

The Duty of Loyalty requires directors to prioritize the corporation's interests over their own personal or financial interests.

(CEA) Certified Ethics Associate Practice Test

(CEA) Certified Ethics Associate Practice Test

CEA Corporate Governance & Compliance 2