1. What is the primary role of corporate governance?
• a) To maximize shareholder returns
• b) To ensure compliance with laws and regulations
• c) To protect the interests of all stakeholders
• d) To manage operational risk
Answer: c) To protect the interests of all stakeholders
Rationale: Corporate governance ensures the company’s accountability to shareholders,
employees, customers, and other stakeholders.
2. Which of the following is a fundamental ethical principle in CPA Australia's
Code of Ethics?
• a) Objectivity
• b) Profit maximization
• c) Corporate strategy
• d) Personal achievement
Answer: a) Objectivity
Rationale: Objectivity requires accountants to avoid bias, conflicts of interest, or undue
influence.
3. What is the key responsibility of the board of directors in a corporation?
• a) Managing day-to-day operations
• b) Implementing internal audit programs
• c) Overseeing the company's strategy and performance
• d) Reviewing employee contracts
Answer: c) Overseeing the company's strategy and performance
Rationale: The board of directors focuses on governance and oversight, not operational
management.
4. The principle of ‘integrity’ in CPA ethics means:
• a) Being honest and straightforward in professional relationships
• b) Maintaining professional skepticism
, • c) Ensuring personal gain
• d) Maximizing corporate revenue
Answer: a) Being honest and straightforward in professional relationships
Rationale: Integrity involves being truthful, transparent, and fair in all professional dealings.
5. A company’s risk management framework is primarily designed to:
• a) Increase profitability
• b) Ensure compliance with legal requirements
• c) Identify, assess, and mitigate risks
• d) Eliminate all risks
Answer: c) Identify, assess, and mitigate risks
Rationale: Risk management aims to minimize potential negative outcomes while balancing
opportunities.
6. What is corporate social responsibility (CSR)?
• a) Maximizing shareholder profits
• b) Voluntary actions that benefit society
• c) A mandatory requirement for businesses
• d) Reducing operational expenses
Answer: b) Voluntary actions that benefit society
Rationale: CSR involves initiatives that contribute to societal well-being beyond what is
required by law.
7. Which of the following is NOT a key principle of corporate governance?
• a) Accountability
• b) Transparency
• c) Responsibility
• d) Exclusivity
Answer: d) Exclusivity
Rationale: Corporate governance focuses on inclusivity and accountability to all stakeholders,
not exclusivity.
, 8. The 'comply or explain' approach in governance refers to:
• a) Mandatory adherence to all regulations
• b) Flexibility in applying governance principles
• c) A strict legal compliance requirement
• d) None of the above
Answer: b) Flexibility in applying governance principles
Rationale: The 'comply or explain' approach allows companies to deviate from governance
codes if they provide an explanation for doing so.
9. In terms of ethics, confidentiality means:
• a) Sharing client information with partners
• b) Keeping client information private unless legally required to disclose
• c) Never disclosing any client information under any circumstances
• d) Sharing information for commercial gain
Answer: b) Keeping client information private unless legally required to disclose
Rationale: Confidentiality protects sensitive information unless disclosure is mandated by law.
10. The ethical principle of 'professional competence and due care' refers to:
• a) Ensuring personal financial success
• b) Maintaining and updating professional knowledge
• c) Delegating tasks to subordinates
• d) Ensuring client satisfaction
Answer: b) Maintaining and updating professional knowledge
Rationale: This principle requires accountants to maintain their skills and knowledge to deliver
competent professional services.
11. Whistleblowing in a corporate context refers to:
• a) Reporting a crime outside the organization
• b) Reporting unethical or illegal activities within the organization
• c) Filing for bankruptcy
• d) Disclosing personal grievances
• a) To maximize shareholder returns
• b) To ensure compliance with laws and regulations
• c) To protect the interests of all stakeholders
• d) To manage operational risk
Answer: c) To protect the interests of all stakeholders
Rationale: Corporate governance ensures the company’s accountability to shareholders,
employees, customers, and other stakeholders.
2. Which of the following is a fundamental ethical principle in CPA Australia's
Code of Ethics?
• a) Objectivity
• b) Profit maximization
• c) Corporate strategy
• d) Personal achievement
Answer: a) Objectivity
Rationale: Objectivity requires accountants to avoid bias, conflicts of interest, or undue
influence.
3. What is the key responsibility of the board of directors in a corporation?
• a) Managing day-to-day operations
• b) Implementing internal audit programs
• c) Overseeing the company's strategy and performance
• d) Reviewing employee contracts
Answer: c) Overseeing the company's strategy and performance
Rationale: The board of directors focuses on governance and oversight, not operational
management.
4. The principle of ‘integrity’ in CPA ethics means:
• a) Being honest and straightforward in professional relationships
• b) Maintaining professional skepticism
, • c) Ensuring personal gain
• d) Maximizing corporate revenue
Answer: a) Being honest and straightforward in professional relationships
Rationale: Integrity involves being truthful, transparent, and fair in all professional dealings.
5. A company’s risk management framework is primarily designed to:
• a) Increase profitability
• b) Ensure compliance with legal requirements
• c) Identify, assess, and mitigate risks
• d) Eliminate all risks
Answer: c) Identify, assess, and mitigate risks
Rationale: Risk management aims to minimize potential negative outcomes while balancing
opportunities.
6. What is corporate social responsibility (CSR)?
• a) Maximizing shareholder profits
• b) Voluntary actions that benefit society
• c) A mandatory requirement for businesses
• d) Reducing operational expenses
Answer: b) Voluntary actions that benefit society
Rationale: CSR involves initiatives that contribute to societal well-being beyond what is
required by law.
7. Which of the following is NOT a key principle of corporate governance?
• a) Accountability
• b) Transparency
• c) Responsibility
• d) Exclusivity
Answer: d) Exclusivity
Rationale: Corporate governance focuses on inclusivity and accountability to all stakeholders,
not exclusivity.
, 8. The 'comply or explain' approach in governance refers to:
• a) Mandatory adherence to all regulations
• b) Flexibility in applying governance principles
• c) A strict legal compliance requirement
• d) None of the above
Answer: b) Flexibility in applying governance principles
Rationale: The 'comply or explain' approach allows companies to deviate from governance
codes if they provide an explanation for doing so.
9. In terms of ethics, confidentiality means:
• a) Sharing client information with partners
• b) Keeping client information private unless legally required to disclose
• c) Never disclosing any client information under any circumstances
• d) Sharing information for commercial gain
Answer: b) Keeping client information private unless legally required to disclose
Rationale: Confidentiality protects sensitive information unless disclosure is mandated by law.
10. The ethical principle of 'professional competence and due care' refers to:
• a) Ensuring personal financial success
• b) Maintaining and updating professional knowledge
• c) Delegating tasks to subordinates
• d) Ensuring client satisfaction
Answer: b) Maintaining and updating professional knowledge
Rationale: This principle requires accountants to maintain their skills and knowledge to deliver
competent professional services.
11. Whistleblowing in a corporate context refers to:
• a) Reporting a crime outside the organization
• b) Reporting unethical or illegal activities within the organization
• c) Filing for bankruptcy
• d) Disclosing personal grievances
