1 .Which of the following are critical improvements related to auditing and financial statements that the Sarbanes-Oxley Act was intended to provide?

a. Improved corporate governance

b. Required reporting on internal controls

c. Acknowledgment of greater audit committee responsibility

d. All of the above

2. In which of the following ways can an audit firm respond to poor corporate governance?

a. Not accept a client with poor corporate governance

b. Perform a more rigorous audit

c. Work more closely with management in performing the audit

d. Either (a) and (b) would be appropriate responses

e. (a), (b), and (c) would all be appropriate responses

3. Effective audit committees should have ongoing, timely, and substantive interaction with which of the following parties?

a. Board

b. Management

c. External auditor

d. Internal auditor

e. Legal counsel

f. All of the above

4 Which of the following statements about effective corporate governance is least accurate?

a. The board's fundamental objective should be to build long-term sustainable growth in shareholder value for the corporation.

b. Management has the primary responsibility for creating a culture of performance with integrity and ethical behavior.

c. Good corporate governance should be viewed as primarily a compliance obligation.

d. Companies should make regular efforts to ensure that they have sound disclosure policies and practices.

e. Independence and objectivity are necessary attributes of board members.

5 In a well-governed organization, which of the following is not management's responsibility in the area of financial reporting and disclosure?

a. Choose which accounting principles best portray the economic substance of company transactions.

b. Implement a system of internal control that assures completeness and accuracy in financial reporting.

c. Ensure that the financial statements contain accurate and complete disclosure.

d. Hire the external audit firm.