TRUE OR FALSE

1. A disclosure is considered material if it reflects the significant economic, environmental, and social impacts of the organization of the stakeholders, and the capacity of the stakeholders to influence the economic, environmental and social impacts or activities of the organization*

True

False

2. An internal auditor should have no personal or professional involvement with the area being audited.*

True

False

3. NASDAQ listing standards require the audit committee to review major issues regarding accounting principles and the presentation of the financial statements.*

True

False

4. External auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations*

True

False

5. Included in the Environment disclosures are the risks and opportunities due to climate change, procurement practices with respect to local suppliers and anti-corruption*

True

False

6. CFO and the audit committee depend heavily on one another*

True

False

7. Auditors are required by the Security and Exchange Commission to report to the audit committee of the publicly traded company all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management officials.*

True

False

8. Audit committees of listed companies are directly responsible for the appointment, compensation, and oversight of the independent auditor, including the resolution of any disagreements with management.*

True

False

9. Independent Auditor is responsible for preparing the financial statements, establishing and maintaining adequate internal control over financial reporting (ICFR), and evaluating the effectiveness of ICFR.*

True

False

10. Under Sarbanes-Oxley Section 301 public company audit committees are directly responsible for the appointment, compensation and oversight of the work of any registered public accounting firm employed by their company.*

True

False

11. In executing their governance responsibilities, audit committees frequently interact with other stakeholders, in addition to the internal and independent auditors.*

True

False

12. the audit committee is responsible for overseeing the entire financial reporting process.*

True

False

13. The reported information shall reflect positive and negative aspects of the reporting organization's performance to enable a reasoned assessment of overall performance.*

True

False

MCQs

1. Which of the following is not an appropriate member of an audit committee?*

The organization's vice president of operations.

A retired executive of a firm that had been associated with the organization.

The vice president of the local bank used by the organization.

An academic specializing in business administration.

2. According to best practice the audit committee:*

Is responsible for designing adequate internal controls.

Selects the auditor.

Nominates the executive board.

Oversees the accounting department.

3. The IIA provides the following checklist of considerations for audit committees in overseeing the internal auditors, except*

The audit committee reviews and approves the internal audit charter and internal audit plan annually

External audit is sufficiently resourced with competent, objective professionals to carry out the External audit plan, which has been reviewed and approved by the audit committee

The audit committee engages in an open, transparent relationship with the CAE.

Internal audit is quality-oriented and has a quality assurance and improvement program in place.

4. To avoid creating conflict between the chief executive officer (CEO) and the audit committee, the chief audit executive (CAE) should*

Request board establishment of policies covering the internal audit activity's (IAA's) relationships with the audit committee.

Strengthen independence through organizational status

Submit copies of all engagement communications to the CEO and audit committee.

Discuss all pending engagement communications to the CEO with the audit committee.

5. The Sarbanes-Oxley Act requires that executive officers attest to all the following except:*

All deficiencies in internal control or any fraud has been disclosed to regulators.

Their conclusions about effectiveness of internal control.

The statements fairly present the company's financial condition.

Based on their knowledge there are no untrue statements or omissions of material fact.

6. Which of the following is not a responsibility of audit committees?*

Reviewing corporate reporting processes.

Relations with the independent auditor.

Management compensation.

Monitoring management.

7. Internal control objectives are, among others:*

Risk assessment

Control environment and monitoring.

Segregation of duties.

Compliance with law and regulations

8. It relates to how company manages the natural resources it needs for its business, as well as how it minimizes its negative impacts to the environment, including biodiversity.*

Social disclosures

Economic disclosures

UN Sustainable development goals

Environment disclosures

9. The following are the Internal Benefits of Sustainability Reporting, except;*

Motivated workforce

Effective management of sustainability risks and opportunities

Improved management systems

Investor attractiveness

10. _______________ provides a formal structure for designing and evaluating the effectiveness of internal control. It emphasizes the role of the boardand, by delegation or regulation, the role of the audit committeein overseeing internal control.

2013 COSO Framework

Sarbanes-Oxley Act

Audit Committee

SASB

11. Sustainability reporting consists of:

Economic issues.

Social and environmental issues.

Economic, social and environmental issues

Environmental issues.

12. Which of the following is an appropriate responsibility of an audit committee?

Reviewing the engagement records of the public accounting firm to determine the firm's competence.

Performing a review of the procurement function of the organization.

Reviewing the internal audit activity's (IAA's) engagement work schedule submitted by the chief audit executive (CAE).

Recommending the assignment of specific internal auditing staff members for specific engagements.