CPA ETHICS UPDATED TEST EXAM MANUAL QUESTIONS
AND ANSWERS GRADED A+
✔✔Regulators - ✔✔Enforce rules to maintain fair market practices
✔✔Avoid Conflicts of Interest - ✔✔Prevent unethical behavior like bribes or abusing
information
✔✔Board & CEO Relationship - ✔✔Board appoints CEO for daily operations
✔✔Board Chair - ✔✔Leads board and sets meeting agenda
✔✔Business Judgement Rule - ✔✔Protects directors acting in good faith and informed
✔✔CEO Powers - ✔✔Acts as director and manager, liaises with shareholders
✔✔Company Secretary - ✔✔Ensures compliance with filing and fees
✔✔Conformance - ✔✔Focus on adhering to rules and regulations
✔✔Corporate Governance - ✔✔Directs and controls organizations effectively
✔✔Corporate Social Responsibility Theory - ✔✔Entities engage in socially beneficial
activities
✔✔Directors' Duties - ✔✔Includes avoiding conflicts, acting in corporation's interest
✔✔Diversity in NFPs - ✔✔Non-profits face governance challenges in resource
allocation
✔✔Effective Governance Framework - ✔✔Ensures fair and transparent markets
✔✔Family-Owned Businesses - ✔✔Owned and operated by family members,
governance challenges
✔✔Global Awareness Factors - ✔✔Trends towards openness, international capital
growth
✔✔Formation of Audit Committee - ✔✔Principles, rules, and risk-based approaches
✔✔Governance Relationship Formula - ✔✔Combines conformance and performance
for effective governance
, ✔✔G20/OECD Principles - ✔✔Guidelines for corporate governance and investor
protection
✔✔Goal Congruency - ✔✔Aligning interests for effective governance
✔✔Governance Failures - ✔✔Result in market crashes and regulatory interventions
✔✔Guidance for Public Sector - ✔✔Balances performance and conformance in
government operations
✔✔Improved Corporate Governance - ✔✔Driven by globalization, shareholder activism,
and market transparency
✔✔Independence - ✔✔Unbiased decision-making, free from influence
✔✔Key Features of Corporations - ✔✔Separate legal entities with limited liability and
perpetual succession
✔✔Market-Based Systems - ✔✔Common in the US and UK, agency issues prevalent
✔✔Monitoring Performance - ✔✔Accountants monitor and report on organizational
performance
✔✔Nomination Committee - ✔✔Recommends succession plans and assesses
performance
✔✔Not-for-Profits - ✔✔Operate for social benefit, reinvest surplus, regulated by ACNC
✔✔OECD Principles - ✔✔Guidelines for effective corporate governance framework
✔✔Performance - ✔✔Focus on achieving economic success and organizational goals
✔✔Primary Functions of the Board - ✔✔Accountability, strategy, monitoring, and policy-
making
✔✔Proprietary Companies - ✔✔Small or large entities with specific criteria for directors
and assets
✔✔Public Companies - ✔✔Larger entities with specific requirements for directors and
shareholders
✔✔Public Sector Governance - ✔✔Government stewardship balancing economic,
social, and political objectives
AND ANSWERS GRADED A+
✔✔Regulators - ✔✔Enforce rules to maintain fair market practices
✔✔Avoid Conflicts of Interest - ✔✔Prevent unethical behavior like bribes or abusing
information
✔✔Board & CEO Relationship - ✔✔Board appoints CEO for daily operations
✔✔Board Chair - ✔✔Leads board and sets meeting agenda
✔✔Business Judgement Rule - ✔✔Protects directors acting in good faith and informed
✔✔CEO Powers - ✔✔Acts as director and manager, liaises with shareholders
✔✔Company Secretary - ✔✔Ensures compliance with filing and fees
✔✔Conformance - ✔✔Focus on adhering to rules and regulations
✔✔Corporate Governance - ✔✔Directs and controls organizations effectively
✔✔Corporate Social Responsibility Theory - ✔✔Entities engage in socially beneficial
activities
✔✔Directors' Duties - ✔✔Includes avoiding conflicts, acting in corporation's interest
✔✔Diversity in NFPs - ✔✔Non-profits face governance challenges in resource
allocation
✔✔Effective Governance Framework - ✔✔Ensures fair and transparent markets
✔✔Family-Owned Businesses - ✔✔Owned and operated by family members,
governance challenges
✔✔Global Awareness Factors - ✔✔Trends towards openness, international capital
growth
✔✔Formation of Audit Committee - ✔✔Principles, rules, and risk-based approaches
✔✔Governance Relationship Formula - ✔✔Combines conformance and performance
for effective governance
, ✔✔G20/OECD Principles - ✔✔Guidelines for corporate governance and investor
protection
✔✔Goal Congruency - ✔✔Aligning interests for effective governance
✔✔Governance Failures - ✔✔Result in market crashes and regulatory interventions
✔✔Guidance for Public Sector - ✔✔Balances performance and conformance in
government operations
✔✔Improved Corporate Governance - ✔✔Driven by globalization, shareholder activism,
and market transparency
✔✔Independence - ✔✔Unbiased decision-making, free from influence
✔✔Key Features of Corporations - ✔✔Separate legal entities with limited liability and
perpetual succession
✔✔Market-Based Systems - ✔✔Common in the US and UK, agency issues prevalent
✔✔Monitoring Performance - ✔✔Accountants monitor and report on organizational
performance
✔✔Nomination Committee - ✔✔Recommends succession plans and assesses
performance
✔✔Not-for-Profits - ✔✔Operate for social benefit, reinvest surplus, regulated by ACNC
✔✔OECD Principles - ✔✔Guidelines for effective corporate governance framework
✔✔Performance - ✔✔Focus on achieving economic success and organizational goals
✔✔Primary Functions of the Board - ✔✔Accountability, strategy, monitoring, and policy-
making
✔✔Proprietary Companies - ✔✔Small or large entities with specific criteria for directors
and assets
✔✔Public Companies - ✔✔Larger entities with specific requirements for directors and
shareholders
✔✔Public Sector Governance - ✔✔Government stewardship balancing economic,
social, and political objectives
