Chapter 4 v.2

Question 1

What is corporate governance

Answer 1

How we govern ourselves- internal rules to implement protocols put in place such as audits.

Question 2

What must you follow to be a quoted company

Answer 2

UK Corporate Governance

Question 3

Is corporate governance a code or a law

Answer 3

A code

Question 4

What are the main sections of the corporate governance code

Answer 4

• Board leadership and effectiveness - headed by an effective board. Fronted by CEO and non- exec
• Effectiveness - balanace of skills on board and transparent
• Accountability- have to be accountable
• Remuneration- salary/ bonus based on company performance
• Relations with shareholders- transparent

Question 5

What is meant by Going Concern relating to the corpoorate governance code

Answer 5

Must show managing in effective way, risk management and internal control

Question 6

What is meant by comply or explain relating to the corpoorate governance code

Answer 6

Companies are required to state in ther annual report that they in compliance with the code

Question 7

Incorporating a business

What two documents need to be completed for a limited company to be regulated on companies house

Answer 7

1- Memorandum of association

2- Articles of association- which will often include a Quorum

Question 8

Under Listing Rules- what do listing rules require quoted companies to produce

Answer 8

half yearly financial reports as well as annualreports

Question 9

Audit and compliance

Who are required under the Companies Act 2006 to have an external audit done?

Answer 9

Any company with two of the following:

• A turnover exceeding 10.2m
• net assets exceeding 5.1m
• more than 50 employees

Must check if accounts are true and fair

Question 10

Audit and compliance

Who appoints an external auditor

Answer 10

Selected by the board. It looks at money in and money out.

Question 11

Audit and compliance

What is an internal audit

Answer 11

Look at finances, money in and money out
Whether u/w authority has been met
Things are completed

Question 12

Audit and compliance

What is a chief internal auditor

Answer 12

The person who proposes a plan of activities to be review by the audit committee.

Question 13

Audit and compliance

Who is head of the audit committee -potential exam question

Answer 13

The non executive director. Never the finance director.

Question 14

Audit and compliance

Who does the internal auditor report to?

Answer 14

The executive director and the head of audit committee (the non executive director)