CPFM Ethics and Corporate Governance in Finance 2

Question 1

Which of the following best describes insider trading?

Accepted Answer

Buying or selling securities based on material non-public information

Answer

Insider trading involves buying or selling a security using material information that is not yet available to the general public, which is illegal under securities law.

Question 2

A company's whistleblower policy is designed primarily to:

Accepted Answer

Allow employees to report misconduct without fear of retaliation

Answer

A whistleblower policy creates a safe, confidential channel for employees to report suspected fraud or misconduct without risking job loss or retaliation.

Question 3

The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted primarily in response to:

Accepted Answer

The 2008 global financial crisis and systemic risk failures

Answer

Dodd-Frank was enacted in 2010 in response to the 2008 financial crisis to increase oversight of financial institutions and reduce systemic risk in the financial system.

Question 4

Under corporate governance best practices, a 'say-on-pay' vote gives shareholders the right to:

Accepted Answer

Approve or reject the executive compensation packages through a non-binding vote

Answer

Say-on-pay votes give shareholders an advisory (non-binding) vote on executive compensation, allowing them to express approval or disapproval of pay practices.

Question 5

Which of the following best describes the role of an external auditor in corporate governance?

Accepted Answer

Providing an independent opinion on whether financial statements are fairly presented

Answer

External auditors independently examine a company's financial statements and internal controls to provide an objective opinion on whether they fairly represent the company's financial position.

CPFM Practice Test

CPFM Practice Test

CPFM Ethics and Corporate Governance in Finance 2