CFE Corporate Governance 2

Question 1

Which board committee is primarily responsible for overseeing the internal audit function and financial reporting integrity?

Accepted Answer

Audit committee

Answer

The audit committee oversees internal audit, external audit relationships, and financial reporting to ensure integrity.

Question 2

Under the Sarbanes-Oxley Act, the CEO and CFO must certify financial statements under which section?

Accepted Answer

Section 302

Answer

Section 302 of SOX requires the CEO and CFO to personally certify the accuracy of financial reports.

Question 3

A 'say-on-pay' vote allows shareholders to express their opinion on which corporate matter?

Accepted Answer

Executive compensation packages

Answer

Say-on-pay votes are non-binding shareholder votes on executive compensation arrangements.

Question 4

Which concept describes the separation of the roles of board chair and chief executive officer?

Accepted Answer

Leadership separation

Answer

Leadership separation (splitting the chair and CEO roles) is considered a best practice for strengthening board oversight.

Question 5

The 'business judgment rule' protects directors from liability when they:

Accepted Answer

Act on informed, good-faith business decisions

Answer

The business judgment rule shields directors who act in good faith, on an informed basis, and in the honest belief that the action is in the best interest of the company.

Certified Fraud Examiner Exam Practice Test

Certified Fraud Examiner Exam Practice Test

CFE Corporate Governance 2