Semester 1 2015 MCQs
1. Select the best alternative to complete the following sentence:
The key aspects of the King III Report revolve around …
1. alternative dispute resolution (ADR) and risk-based internal audit.
2. sustainability.
3. shareholders and remuneration.
4. leadership, sustainability and corporate citizenship.
2. After incorporation of the company, the board must appoint the audit committee
members within how many days?
1. 30 business days.
2. 40 business days.
3. 50 business days.
4. 60 business days.
3. The chairman of the board of directors must be…
1. an independent non-executive director.
2. a previously disadvantaged person.
3. the chief executive officer (CEO) of the company, or an independent non-executive
director who then reports to the CEO.
4. the CEO of the company.
4. Select the best alternative to complete the following sentence: The King III Report and
King III Code of Governance for South Africa is based on the principle of comply or explain,
which means that …
1. companies must adhere to the rules and principles, and if they don’t, they will be
punished.
2. the principles and practices recommended by King III should be the focus of
companies’ corporate governance.
3. the directors of a company can decide that to comply with certain principles and
practices might not be in the best interest of the company, and may therefore
provide explanations for not applying these principles and practices.
4. all companies must always apply the King III principles and practices.
5. Which of the following companies are required by the Companies Act to have an audit
committee?
i) State-owned companies.
ii) Public companies.
iii) Private companies.
iv) A public company that is a subsidiary of a holding company which has an audit
committee, but which will not perform the functions of an audit committee
within the subsidiary.
1
, 1. Options (i) and (ii).
2. Options (ii) and (iii).
3. Options (i), (ii) and (iv).
4. All the options.
6. Select the incorrect statement regarding the number of times per annum the various
committees should meet.
1. The board of directors must meet at least every four months.
2. The risk committee must meet at least every six months.
3. The audit committee must meet at least twice a year.
4. The remuneration committee’s number of meetings per annum are not specified in
the King III Report.
7. Which ONE of the following alternatives is a function of the remuneration committee?
1. To assist with the process of identifying suitable members of the board.
2. To assist the board in setting and administering remuneration policies.
3. To consider the risk management policy, and to plan and monitor the risk
management process.
4. To set and administer remuneration policies and ensure that these policies are
being implemented by the board.
8. Which ONE of the following alternatives represents the “Triple bottom line” concept on
which company reporting should occur?
1. Economic aspects, environmental aspects, and social aspects.
2. Economic aspects, political aspects and environmental aspects.
3. Environmental aspects, health and safety aspects and financial aspects.
4. Educational aspects, social aspects and financial aspects.
9. Which ONE of the following alternatives is not one of the ethical values on which
decisions and actions of directors should be based?
1. Conscience.
2. Responsibility.
3. Transparency.
4. Accountability.
10. Attending to the risks involved where a bank offers the latest computer – based
services, such as electronic fund transfers (EFTs), is an example of the governance of:
1. internal auditing.
2. information technology.
3. risk.
4. stakeholder relationships.
11. Which ONE of the following statements regarding internal control is incorrect?
2
1. Select the best alternative to complete the following sentence:
The key aspects of the King III Report revolve around …
1. alternative dispute resolution (ADR) and risk-based internal audit.
2. sustainability.
3. shareholders and remuneration.
4. leadership, sustainability and corporate citizenship.
2. After incorporation of the company, the board must appoint the audit committee
members within how many days?
1. 30 business days.
2. 40 business days.
3. 50 business days.
4. 60 business days.
3. The chairman of the board of directors must be…
1. an independent non-executive director.
2. a previously disadvantaged person.
3. the chief executive officer (CEO) of the company, or an independent non-executive
director who then reports to the CEO.
4. the CEO of the company.
4. Select the best alternative to complete the following sentence: The King III Report and
King III Code of Governance for South Africa is based on the principle of comply or explain,
which means that …
1. companies must adhere to the rules and principles, and if they don’t, they will be
punished.
2. the principles and practices recommended by King III should be the focus of
companies’ corporate governance.
3. the directors of a company can decide that to comply with certain principles and
practices might not be in the best interest of the company, and may therefore
provide explanations for not applying these principles and practices.
4. all companies must always apply the King III principles and practices.
5. Which of the following companies are required by the Companies Act to have an audit
committee?
i) State-owned companies.
ii) Public companies.
iii) Private companies.
iv) A public company that is a subsidiary of a holding company which has an audit
committee, but which will not perform the functions of an audit committee
within the subsidiary.
1
, 1. Options (i) and (ii).
2. Options (ii) and (iii).
3. Options (i), (ii) and (iv).
4. All the options.
6. Select the incorrect statement regarding the number of times per annum the various
committees should meet.
1. The board of directors must meet at least every four months.
2. The risk committee must meet at least every six months.
3. The audit committee must meet at least twice a year.
4. The remuneration committee’s number of meetings per annum are not specified in
the King III Report.
7. Which ONE of the following alternatives is a function of the remuneration committee?
1. To assist with the process of identifying suitable members of the board.
2. To assist the board in setting and administering remuneration policies.
3. To consider the risk management policy, and to plan and monitor the risk
management process.
4. To set and administer remuneration policies and ensure that these policies are
being implemented by the board.
8. Which ONE of the following alternatives represents the “Triple bottom line” concept on
which company reporting should occur?
1. Economic aspects, environmental aspects, and social aspects.
2. Economic aspects, political aspects and environmental aspects.
3. Environmental aspects, health and safety aspects and financial aspects.
4. Educational aspects, social aspects and financial aspects.
9. Which ONE of the following alternatives is not one of the ethical values on which
decisions and actions of directors should be based?
1. Conscience.
2. Responsibility.
3. Transparency.
4. Accountability.
10. Attending to the risks involved where a bank offers the latest computer – based
services, such as electronic fund transfers (EFTs), is an example of the governance of:
1. internal auditing.
2. information technology.
3. risk.
4. stakeholder relationships.
11. Which ONE of the following statements regarding internal control is incorrect?
2
