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18 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is the primary duty of the board of directors?
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To monitor management behavior
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mngt.
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What is the responsibility of the nominating or corporate governance committee of the board of directors?
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Oversee the board Responsible for hiring new CEO.
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What is the responsibility of the audit committee of the board of directors?
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Th audit committee appoints and oversees the external auditor.
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What is the duty of the compensation committee of the board of directors?
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The compensation committee handles the CO'S compensation package.
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What does the NYSE NASDAQ require of the board of directors?
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They require the board to be independent.
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What is the main goal in an executive compensation package ?
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The package should ensure that the goals of management should match those of the shareholders.
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How can an executive compensation package ensure that goals of management align with those of shareholders?
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Executive compensation should create and incentive for management go govern in a shareholders-friendly way that dosnt sacrifice the long - term success of the enterprise for short term gains.
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Which influences help mold the direction that management takes?
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They range from Internal (Board of Directors - audit Committee - Internal control) to external (Creditors-SEC-IRS). These influences should not be tainted by undue influence from mngt. or have financial ties to mngt. such as compensation related duties
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What is shirking?
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When mngt. dosnt act in the best interest of the shareholders. It can be alleviated by tying compensation to stock performance or company profits.
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What requirements are imposed on a public company under SArbaned-Oxley?
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Mngt. must submit a report on the effectiveness of Internal control in the 10k.
Mngt must disclose significant internal control deficiencies. CFO/CEO must certify that the financial statements comply with securities laws and family presents the financial condition of the co. |
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What characteristics are promoted by the COSO framework on internal control
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Reliable Financial reporting, Effective and efficient operations, compliance.
(O.R.C ) |
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What are the elements of the control environment?
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Commitment to Ethics and integrity
Board of directors & Audit committee Mngt. operating Style Organizational Structure Authority & Roles of Responsibilities HR policies |
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What are control activities ?
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A component of Internal control that includes actions being taken to promote the control environment
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What are the basic elements(components) of Internal control ?
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Control Environment
Risk Assessment Information & Communication Monitoring Activities Existing Control Activities |
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What is the significance of The information and Communication aspect of Internal control?
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Management must have access to relevant and timely information to make good decisions.
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How does monitoring affect internal control?
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Internal Control must be constantly monitored and evaluated for effectiveness.
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What activities does the COSO framework for Enterprise Risk Mngt.(ERM) include?
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Identify risk factors
Promotes Risk response decisions Compares Mngt Risk Vs. Shareholders Goals Aids in evaluating opportunities Promotes quicker capital movement Does not eliminate all risk |
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What are possible responses to risk under the COSO framework for Enterprise Risk Management (ERM) ?
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Avoid or Reduce
Share of Accept |
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