Corporate Governance And Ethics mcq with answer

Q1. Corporate governance is about ethical conduct in business.
(a) True
(b) False
Answer: (a) True

Q2. The board of directors does not play important role in corporate governance.
(a) True
(b) False
Answer: (b) False

Q3. Corporate governance pressurizes the organisation to comply with the laws, regulations and expectations of society.
(a) True
(b) False
Answer: (a) True

Q4. Preparation of the organisation’s financial statement is not the functional area of governance.
(a) True
(b) False
Answer: (b) False

Q5. Shareholders delegate decision rights to the managers.
(a) True
(b) False
Answer: (a) True

Q6. Organisations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision-making.
(a) True
(b) False
Answer: (a) True

Q7. Corporate governance ensures easy access to capital.
(a) True
(b) False
Answer: (a) True

Q8. Enterprise doesn’t need any mission or vision.
(a) True
(b) False
Answer: (b) False

Q9. The institutional investors have no role to play in corporate governance.
(a) True
(b) False
Answer: (b) False

Q10. All the stakeholders participate in corporate governance.
(a) True
(b) False
Answer: (a) True

Q11. Nominee Directors include representatives of financial institutions and —-
Answer: Government nominees

Q12. Corporate governance and the —- are closely linked.
Answer: enterprise culture

Q13. Creditors need financial information on the operations of the enterprise on a —- basis.
Answer: continuous

Q14. OECD: Organisation of —- Cooperation and Development.
Answer: Economic

Q15. Property rights are viewed simply as —- over physical and human assets.
Answer: control rights

Q16. The agency problem was effectively identified by —- .
Answer: Adam Smith

Q17. In Japanese model, the financial institution has —- role in governance.
Answer: Accrual

Q18. In German model, the supervisory board is elected by —- .
Answer: shareholders and labour unions

Q19. CII developed code of corporate governance in —- .
Answer: 1997

Q20. —- committee took forward the recommendations of KM Birla Committee.
Answer: Naresh Chandra

Q21. Monitoring by the board of directors is one of the external control.
(a) True
(b) False
Answer: (b) False

Q22. Bankruptcy only affect the creditors.
(a) True
(b) False
Answer: (b) False

Q23. Shareholders are one of the important stakeholders in an organisation.
(a) True
(b) False
Answer: (a) True

Q24. Equitable treatment of shareholders is made for the protection of the shareholders rights.
(a) True
(b) False
Answer: (a) True

Q25. Minimum offer price is the market price of the share.
(a) True
(b) False
Answer: (b) False

Q26. A common complaint by shareholders is delay in issuance of share certificates.
(a) True
(b) False
Answer: (a) True

Q27. Shareholders have rights to elect and remove members on the board.
(a) True
(b) False
Answer: (a) True

Q28. Government is entrusted with the responsibility of convening the Annual General Meetings of the companies.
(a) True
(b) False
Answer: (b) False

Q29. To ensure that takeover bids are serious, there has to be an escrow account.
(a) True
(b) False
Answer: (a) True

Q30. Competition is an external corporate governance control.
(a) True
(b) False
Answer: (a) True

Q31. The powers and responsibilities of the Board of Directors is mentioned in —- .
Answer: organisation bylaws

Q32. Individuals on the Board who are not a part of the company are referred to as —- directors.
Answer: non-executive/independent

Q33. The ethical conduct of board of directors denotes the insertion of —- and —- responsibilities.
Answer: socio-cultural, environmental

Q34. —- committee plays a vital role in selecting independent non-executive Directors to the Board.
Answer: Nomination

Q35. Nomination committee is appointed by the —- .
Answer: Board of Directors

Q36. —- suggests a maximum ceiling of managerial remuneration.
Answer: Schedule XII of Companies Act

Q37. The main purpose of forming the remuneration committee is to establish a —- relationship.
Answer: pay-performance

Q38. The SEBI Committee-I was presided by —- .
Answer: KM Birla

Q39. The percentage of the share ownership of the —- influences the inclusion of the insider in the remuneration committee.
Answer: CEO

Q40. The profit earned by the company with reference to the cost of capital in terms of economic profit is referred to as —- .
Answer: Economic Value Added

Q41. Auditing and —- are two different function but they reinforce each other.
Answer: governing

Q42. Auditing includes investigation, —- and reporting of economic events.
Answer: attestation

Q43. Both —- and —- auditors need to play a vital role to ensure proper corporate governance.
Answer: external, internal

Q44. —- of the company has the power to hire or fire the Chief Audit Executive.
Answer: Chief Financial Officer

Q45. —- opined that the Chairman of the audit committee should be an independent director.
Answer: KM Birla Committee

Q46. The set of standards for practices in auditing are —- .
Answer: Generally Accepting Audit Standards

Q47. As per the SEBI guidelines, the audit committee shall meet at least —- a year.
Answer: thrice

Q48. Audit committee is a committee of the —- .
Answer: Board

Q49. The audit committee should ensure that the external auditors are —-
Answer: independent

Q50. An audit committee should be aware of technological changes, which is —- risk/condition.
Answer: external

Q51. The US Sarbanes Oxley Act (‘SOX’) works on the basis of —- .
Answer: comply or be punished

Q52. The Greenbury Committee were keen to ensure that directors’ remuneration was linked to —- .
Answer: company performance

Q53. —- Committee made important contribution for the functioning of pension funds.
Answer: Hampel

Q54. —- highlighted the need for having appropriate accountability and checks and balances within each bank.
Answer: Basel Committee

Q55. Basel II is also known as —- .
Answer: New Basel Accord

Q56. The Board of Directors has important —- responsibilities towards the shareholders of the company.
Answer: fiduciary

Q57. Non-executive directors have a —- role to play.
Answer: consultative

Q58. Generally, a base salary, performance bonus and —- make up the remuneration of directors on Board.
Answer: stock option

Q59. The Ganguly Committee is of the view that the draft minutes of the board meeting should be forwarded to the directors within —- hours of the meeting.
Answer: 48

Q60. The Ganguly Committee is of the view that it is desirable to have a —- for appointing independent/non-executive directors of banks.
Answer: nomination committee

Q61. The word ethics has originated from the word —-.
Answer: Ethikos

Q62. The basic responsibility of a business towards shareholders is to —- for them.
Answer: create wealth

Q63. Ethical principle can be classified as —-
Answer: teleological and deontological

Q64. —- and —- are dominant principles in ethics.
Answer: Honesty, goodness

Q65. Four important group that influence business are shareholders, employees, customers and —-
Answer: society

Q66. Employees should get —- wages.
Answer: fair

Q67. The interest of all the stakeholders in business is often —- .
Answer: conflicting

Q68. It is a responsibility of the firm towards its —- to avoid any type of cartel formation that a attempts to reap monopoly profits.
Answer: customer

Q69. E-choupal is an initiative by —-
Answer: ITC

Q70. Government is thinking of making it mandatory for the companies to spend —-% of their net profits on CSR.
Answer: 2

Q71. The two main sources of environmental threats are —- and —- .
Answer: pollution, resource depletion

Q72. Ozone layer is destroyed by —- gases.
Answer: CFC

Q73. Oil spills result from —- .
Answer: offshore drilling

Q74. —- seeks to meet the needs and aspirations of the present without compromising the needs of future generations.
Answer: Sustainable development

Q75. The book ‘Earth in the Balance’ is written by —- .
Answer: Al Gore

Q76. To make manufacturing more environment friendly, industries are adopting a new concept called —-
Answer: industrial ecology

Q77. India set up the National Committee on Environment Planning and Coordination (NCEPC) after the —- Conference.
Answer: Stockholm

Q78. —- Committee recommended for the establishment of a separate Department of Environment.
Answer: Tiwari

Q79. —- Act was passed in 1986 for the protection of environment.
Answer: Environment Protection

Q80. Under the —- plan, a cell to ensure effective implementation of anti-pollution measures and measures for the protection of environment was set up.
Answer: 8th

Q81. Media can be used to promote —- communication.
Answer: two-way

Q82. Media —- includes art, reports of facts, and expressions of ideas.
Answer: content

Q83. Businesses arrange for —- meetings with people who may not be direct stakeholders but still interested in the business.
Answer: informal

Q84. Companies distribute their —- to disseminate more information to the interested parties.
Answer: newsletter

Q85. Advertising is a —-form of non-personal presentation of a company’s products.
Answer: paid

Q86. The body governing the ethical conduct in ads in India is —- .
Answer: ASCI

Q87. One of the major ethical issue in advertising is the use of —- .
Answer: deception

Q88. —- is a qualitative medium of product, brand or company promotion.
Answer: Sponsorship

Q89. The essence of the media sector is the separation between creation and —- .
Answer: distribution/consumption

Q90. In —-, there is no difference between creation and consumption.
Answer: theatre

Q91. The extent of market imperfection can be gauged in terms of the discrepancy between the actual price and the —- price.
Answer: competitive

Q92. A market where a large number of firms produce somewhat different products is called —-
Answer: monopolistic competition

Q93. —- is an extreme form of imperfect competition.
Answer: Monopoly

Q94. In perfect competition, firms sell —- products.
Answer: homogeneous

Q95. —- is entrusted with the task of eliminating practices having adverse impact on competition.
Answer: Competition Commission of India

Q96. —- Act was created to protect interests of the common man.
Answer: MRTP

Q97. —- is an agreement among the contenders for bid to be offered at auction or not to be bid at auction.
Answer: Collective bidding

Q98. The main function of the —- is to make preliminary investigation before an inquiry by the MRTP Commission.
Answer: Director General

Q99. —- Act provides that no enterprise shall abuse its dominant position.
Answer: Competition

Q100. —- price controls exist in respect of commodities and/or factors whose prices are fixed by some sort of a judicial body.
Answer: Statutory

Q101. Two types of foreign trade controls are —- control and —- control.
Answer: import, export

Q102. Exchange control attempts to influence the —- Directly.
Answer: balance of payments

Q103. —- is one of the oldest stock exchanges in India and its market indicator is Sensex.
Answer: BSE

Q104. The two national level stock exchanges in India are —- and —- of India.
Answer: Bombay Stock Exchange, National Stock Exchange

Q105. —- is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India.
Answer: NSE

Q106. SEBI is the —- for the Securities Market in India.
Answer: regulator

Q107. —- provides a quote-driven automated trading facility with an order book functioning as an auxiliary jobber.
Answer: Bombay On Line Trading

Q108. OCTEI was modelled on —- .
Answer: NASDAQ

Q109. The Board of SEBI consists of —- members.
Answer: 6

Q110. Insider trading in securities is prohibited by SEBI under —- .
Answer: Insider Trading Regulations, 1992

Q111. —- agree to take unsubscribe portion of the shares issue.
Answer: Underwriter

Q112. In general, the index of the utilitarian principle is —- .
Answer: Per capita income

Q113. —- policy brought new investment opportunities for the private sector in India.
Answer: Liberalization

Q114. Government of India restricted the expansion of big business houses through the —- Act.
Answer: MRTP

Q115. Government often uses quotas to restrict —- .
Answer: Imports

Q116. Demand depends upon the purchasing power of the consumer which, in turn, depends upon —- .
Answer: Supply of money

Q117. In transition economies, investments made by the government helps the private sector. This comes under —- role of the government.
Answer: Entrepreneurial

Q118. The —- declares the key areas where the state is going to invest and support in the coming five years.
Answer: Planning Commission

Q119. IRDA was established in the year —- .
Answer: 1999

Q120. —- is an apex body of all Asset Management Companies which has been registered with SEBI.
Answer: AMFI

Q121. —- are the worst sufferers of the price risk.
Answer: Traders

Q122. —- is considered the first de-mutualised, online exchange dealing in numerous commodities.
Answer: National Multi-commodity Exchange of India Limited

Q123. SEBI established in 1988 and became a fully autonomous body by the year 1992.
(a) True
(b) False
Answer: (a) True

Q124. Private companies can enjoy the right to transfer shares.
(a) True
(b) False
Answer: (b) False

Q125. The Department of Company Affairs (DCA) has amended the Companies Act, 1956 several times in recent years to improve corporate governance and modernise India’s company law.
(a) True
(b) False
Answer: (a) True

Q126. India has 22 stock exchanges.
(a) True
(b) False
Answer: (a) True

Q127. Companies can be divided into public and private companies only, according to Indian Companies Act.
(a) True
(b) False
Answer: (b) False

Q128. The stock exchange is required to file a compliance report with SEBI for each listed company for each quarter.
(a) True
(b) False
Answer: (b) False

Q129. The Board of Directors of every company is required to present the company’s financial statements to the shareholders at every Annual General Meeting.
(a) True
(b) False
Answer: (a) True

Q130. Clause 49 has been prepared by the Reserve Bank of India.
(a) True
(b) False
Answer: (b) False

Q131. Department of Company Affairs suggested the setting up of a Centre for Corporate Excellence.
(a) True
(b) False
Answer: (a) True

Q132. National Code of Corporate Governance led to changes in the stock exchange listing rules.
(a) True
(b) False
Answer: (a) True

Q133. In South Africa the Code applies only to the companies with securities listed on the JSE.
(a) True
(b) False
Answer: (b) False

Q134. Bank is not considered major key player in Japanese model of corporate governance.
(a) True
(b) False
Answer: (b) False

Q135. King Report first published in 1994.
(a) True
(b) False
Answer: (a) True

Q136. Transparency is one of the seven characteristics identified by the King Report.
(a) True
(b) False
Answer: (a) True

Q137. Application code applies to al companies with securities listed on JSE.
(a) True
(b) False
Answer: (a) True

Q138. Bank and Keiretsu are two main elements of Japanese corporate governance system.
(a) True
(b) False
Answer: (a) True

Q139. Japanese basic attitude towards business is dominated by more by strong professional values than social values.
(a) True
(b) False
Answer: (b) False

Q140. The legal system of Japan plays a very important role in policymaking.
(a) True
(b) False
Answer: (a) True

Q141. According to Japanese law, the shareholders cannot put resolutions on the agenda for the annual meeting.
(a) True
(b) False
Answer: (b) False

Q142. As per the King’s Committee report, the board should appoint an audit committee that has a majority of independent executive directors.
(a) True
(b) False
Answer: (b) False

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