Select the correct answer for each of the following questions.

1. A major impact of the Foreign Corrupt Practices Act of 1977 is that registrants subject to the Securities Exchange Act of 1934 are required to:

a. Keep records that reflect the transactions and dispositions of assets and to maintain a system of internal accounting controls.

b. Provide access to records by authorized agencies of the federal government.

c. Record all correspondence with foreign nations.

d. Prepare financial statements in accordance with international accounting standards.

e. Produce full, fair, and accurate periodic reports on foreign commerce, foreign political party affiliations, or both.

2. The requirements of the Foreign Corrupt Practices Act of 1977 to devise and maintain an adequate system of internal accounting control is assigned in the act to the:

a. Chief financial officer.

\(b\). Board of directors.

c. Director of internal auditing.

d. Company's external auditor.

e. Company as a whole with no designation of specific persons or positions.

3. As far as the SEC is concerned, the existence of a public company's reasonably effective system of internal accounting control:

a. Is a matter that requires no specific disclosure or comment by management in annual reports or filings with the SEC.

b. Is not required if financial statements can be presented in accordance with generally accepted accounting principles.

c. Must be specifically attested to in the audit report of the registrant's external accounting firm.

d. Is required only to the extent necessary to deter company personnel from bribing foreign governmental or political officials.

e. Is a matter about which the SEC has no authority under federal law.

4. Shareholders may ask or allow others to enter their vote at a shareholders' meeting that they are unable to attend. The document furnished to shareholders to provide background information for their vote is a:

a. Registration statement.

b. Proxy statement.

c. \(10-\mathrm{K}\) report.

d. Prospectus.

e. Proxy.

5. Formation and meaningful utilization of an audit committee of the board of directors is required of publicly traded companies that are subject to the rules of the:

a. Securities and Exchange Commission.

b. Financial Accounting Standards Board.

c. New York Stock Exchange.

d. National Association of Securities Dealers.

e. SEC Practice Section of the American Institute of Certified Public Accountants' Division of Firms.

6. An audit committee of the board of directors consisting of outside directors should be objective in arbitrating disputes between a company's top management and the external auditor because audit committee members:

a. Have only limited contacts with the external auditor.

b. Have no direct responsibility for the results of a company's operations.

c. Usually have no influence on the hiring of the external auditor.

d. Rely on opinions of senior management in resolving disputes with the external auditor.

e. Are required by the Securities Exchange Act of 1934 to oversee the progress of the annual external audit.
7. An external auditor's involvement with Form \(10-\mathrm{Q}\) that is being prepared for filing with the SEC would most likely consist of:

a. An audit of the financial statements included in Form 10-Q.

b. A compilation report on the financial statements included in Form 10-Q.

c. Issuing a comfort letter that covers stub-period financial data.

d. Issuing an opinion on the internal controls under which the Form 10-Q data were developed.

e. A review of the interim financial statements included in Form 10-Q.