Deck 16: The Role of Gatekeepers in Corporate Governance

Question 1

Which one of the following statements is correct?

A)The empirical evidence clearly suggests that industry regulation improves corporate governance.
B)The existing evidence suggests that industry regulation is a substitute for good corporate governance.
C)The existing evidence is as yet inconclusive about the impact of industry regulation on corporate governance.
D)None of the above.

Answer 1

C

Question 2

What is a Chinese wall?

A)These are rules that prevent gatekeepers from talking to each other.
B)The Great Wall of China is probably the most famous example of a Chinese wall.
C)Chinese walls are set up within investment banks to separate departments and persons that hold private information from those that may benefit from that private information.
D)None of the above.

Answer 2

C

Question 3

Which one of the following statements is correct?

A)Forensic finance deals with misconducts and malpractice in financial markets.
B)Forensic finance deals with the investigation of the financial affairs of victims of violent crimes.
C)Forensic finance deals with the investigation of financial fraud in IPO firms.
D)None of the above.

Answer 3

A

Question 4

Which one of the following statements is correct?

A)Section 203 of the Sarbanes-Oxley Act (SOX)prescribes that audit firms should be rotated every five years.
B)Section 203 of SOX requires that the lead audit partner and the audit partner responsible for reviewing the audit are rotated every five fiscal years.
C)There is no such section in SOX.
D)None of the above.

Question 5

Which one of the following is the correct definition of capture?

A)Capture is one of the desirable attributes for gatekeepers.
B)Capture refers to a successful hostile takeover and seizing control of the target.
C)Capture refers to the influence a client or supervisee may have over its gatekeeper and which may prevent the latter from fulfilling its legal duties.
D)None of the above.