CPA BAR Corporate Governance
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Avg score: 60% • Most missed: “In accordance with its ERM process, Catalina Corp. identifies events and analyze…”
Key Corporate Governance Components in CPA BAR The Agency Problem: Addresses conflicts of interest when company owners (shareholders) are separate from managers (agents). Internal Forces: Corporate charters, bylaws, codes of ethics, board of directors, officers, and internal audit functions. External Forces: External auditors, regulations (e.g., PCAOB, SEC), and legal frameworks. Key Principles: Responsibility, accountability, fairness, and transparency.  Key Governance Responsibilities Board of Directors: Defines corporate governance, ensures fair financial reporting, and prevents the... Show more
CPA BAR Corporate Governance
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16 Questions

1. Under the Sarbanes-Oxley Act of 2002, an audit committee expert must have an understanding of which of the following?
2. According to the COSO ERM framework, which of the following would involve the determination of the likelihood and impact of events on the achievement of objectives?
3. In accordance with its ERM process, Catalina Corp. identifies events and analyzes risks. The company wants to assess its risk after management’s response to the risk. This type of risk is indicative of which of the following?
4. The existence of a published code of ethics and a periodic acknowledgment that ethical values are understood is evidence of:
I. the development of ethical values and ensuring that those values are understood and taken seriously
II. the board of directors understanding and exercising oversight responsibility related to financial reporting and related internal control
5. Active engagement by an audit committee in representing the board of directors relative to all matters of internal and external audits is evidence of:
I. the board’s understanding of its oversight responsibility over financial reporting
II. the need for an organizational structure to support effective internal control over financial reporting
6. Which component of the COSO ERM framework addresses a corporation’s risk management philosophy and risk appetite?,Risk assessment,Control (internal) environment,Information and communication,Control activities,b,The control (internal) environment component of the COSO ERM framework sets an entity’s overall environment tone and reflects its risk management philosophy
7. Under the Sarbanes-Oxley Act of 2002, which of the following services would an auditor be permitted to perform for its public client?
I. Tax compliance services
II. Bookkeeping services
III. Legal services
8. The existence of a published code of ethics and a periodic acknowledgment that ethical values are understood is evidence of:
I. the development of ethical values and ensuring that those values are understood and taken seriously
II. the board of directors understanding and exercising oversight responsibility related to financial reporting and related internal control
9. Active engagement by an audit committee in representing the board of directors relative to all matters of internal and external audits is evidence of:
I. the board’s understanding of its oversight responsibility over financial reporting
II. the need for an organizational structure to support effective internal control over financial reporting
10. The control activities component of the ERM framework includes key elements that relate to:
I. the policies and procedures that ensure appropriate responses to identified risks
II. integrity and ethical values
11. Benefits to establishing an enterprise risk management (ERM) system within an organization include all of the following EXCEPT:,more effective capital allocation,the ability to respond to opportunities expediently,the ability to avoid all risks posed to the organization,the ability to anticipate potential events,c,Enterprise risk management (ERM) is a process (effected by an entity’s board of directors
12. According to the COSO, reporting that triggers prompt exception resolution, root cause analysis, and control updates illustrates the principle of:
13. Cohen Corp. recently relocated its manufacturing plan to a region that will allow the company to reduce its tax liability. However, this new region is also prone to tornadoes. In order to insure the plant from tornado losses, Cohen purchased a property and casualty insurance policy. Cohen employed what type of risk response when purchasing this insurance policy?
14. Under the Sarbanes-Oxley Act of 2002, which of the following services would an auditor be permitted to perform for its public client?
I. Tax compliance services
II. Bookkeeping services
III. Legal services
15. According to the COSO framework, variance analysis primarily supports:
16. The Sarbanes-Oxley Act of 2002 addresses the problems related to inadequate board oversight by requiring public companies to have an:
I. audit committee
II. annual audit for all issuers

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