AUE2601 EXAM PREP.
1
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.
...
,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:
11. Which ONE of the following statements regarding internal control is incorrect?
2
, 1. Monitoring of the internal control process is all about determining whether the
control activities are actually taking place.
2. Control activities are actions which are carried out to achieve the entity’s objectives.
3. The control environment is about technical competence and ethical commitment.
4. Internal control procedures are designed to address and limit potential risks.
12. Which ONE of the following control activities in a payroll and personnel business cycle is
an example of segregation of duties?
1. Before the batch of clock cards is transferred for payroll preparation, the section
head should check calculations and authorise overtime payment.
2. The appointment or dismissal of employees should be signed by the section head
and counter-signed by the section manager after referring to the budget.
3. Any unclaimed wage packages should be retained by the paymaster who should lock
them away.
4. Wage packets should be made up by two wage department members, whilst the
payout of wages should be conducted by an independent paymaster and the section
foreman.
13. Select the correct alternative to complete the following statement:
The “occurrence” management assertion means that …
1. all assets, liabilities, transactions or events which should have been recorded, have
been recorded.
2. amounts and other data relating to recorded transactions and events have been
recorded appropriately.
3. a transaction or event which has been recorded, took place and pertains to the
entity.
4. transactions and events have been recorded in the proper accounts.
14. Which ONE of the following internal controls is not an example of a physical access
control in a computerised environment?
1. Users should provide unique user IDs and unique passwords to gain access to the
system.
2. Entry and exit points to the data centre should be limited to one and may be under
closed circuit TV surveillance.
3. The building in which the equipment that runs the computerised system is housed
(for example the servers and CPU), should have a dedicated room to which only a
dedicated number of personnel should have access.
4. Company personnel other than IT personnel should not need to enter the data
centre and access should be controlled.
15. Which ONE of the following control activities is an example of isolation of
responsibility?
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