QUESTION: 205

Which of the following is a tool that companies use to obtain a quantitative rating of a financial institution’s level of service?

Relationship review
Score card
Service agreement
CAMELS rating

Answer(s): B

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XYZ Inc. has limited cash flow, total liabilities to total assets greater than 52%, and a high WACC. To help meet the goal of lowering their WACC, the company plans to issue several million dollars of private equity to the chairman of the board. If the company proceeds with this plan, the company may:

not comply with SOX requirements.
violate shareholder pre-emptive rights.
require approval from PCAOB.
need to report the large currency transaction.

Answer(s): B

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QUESTION: 207

XYZ Inc. is a publicly traded company with revenues of $1B and an operating profit of 7.5%. The treasury organization consists of a treasurer and an assistant treasurer. The assistant treasurer is responsible for the creation and approval of all payments. The treasurer is responsible for compilation of the financial statements. Under Section 404 of the Sarbanes-Oxley Act, what should be viewed as a concern?

Audit committee governance
Segregation of duties
Subcertification
Signature on SEC Form 10-K

Answer(s): B

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QUESTION: 208

DGB Inc.’s CEO and founder retired shortly after the company went public two years ago. DGB Inc. has recently struggled, and the founder has agreed to return as an independent director. What violation, if any, has occurred?

The cooling-off period has not been met.
Section 404 of the Sarbanes-Oxley Act has been violated.
ERISA disclosure requirements have not been met.
No violation has occurred.

Answer(s): A

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QUESTION: 205

QUESTION: 206

QUESTION: 207

QUESTION: 208