CPA CFE Strategy and Governance

Question 1

In Porter's Five Forces framework, which force analyzes the ease with which new competitors can enter a market?

Accepted Answer

Threat of new entrants

Answer

Bargaining power of suppliers

Answer

Threat of substitute products

Answer

Rivalry among existing competitors

Question 2

What is the primary role of the board of directors in corporate governance?

Accepted Answer

Overseeing management, setting strategic direction, and protecting shareholder interests

Answer

Managing day-to-day operations of the company

Answer

Preparing financial statements and tax returns

Answer

Conducting internal audits and compliance reviews

Question 3

A company pursues a cost leadership strategy. Which of the following actions best supports this strategy?

Accepted Answer

Achieving economies of scale, tight cost controls, and operational efficiencies

Answer

Investing heavily in product differentiation and premium branding

Answer

Focusing on a narrow market niche with specialized products

Answer

Charging premium prices to cover high production costs

Question 4

Under Canadian corporate governance guidelines, what is the recommended composition of the audit committee?

Accepted Answer

Entirely independent directors who are financially literate

Answer

A majority of management directors

Answer

An equal mix of independent and non-independent directors

Answer

Any directors chosen by the CEO

Question 5

What does a SWOT analysis evaluate?

Accepted Answer

Internal strengths and weaknesses, and external opportunities and threats

Answer

Only the external competitive environment

Answer

Only the financial performance of a company

Answer

The technical specifications of a company's products

Question 6

In the context of enterprise risk management (ERM), what is risk appetite?

Accepted Answer

The amount and type of risk an organization is willing to accept in pursuit of its objectives

Answer

The maximum loss a company has ever experienced

Answer

The total insurance coverage held by the company

Answer

The number of risks identified in the risk register