1.Which of the following statements concerning Board committees is FALSE?

A)   The audit committee has authority over the procedures used to audit the entire corporate group including subsidiaries and affiliates.

B)   The compensation committee should consist of independent members and link executive compensation to long-term performance.

C)   Members of the audit committee should be independent experts in accounting and finance.

D)   The nominations committee is responsible for recruiting qualified board members and preparing an executive management succession plan.

2.A special-purpose board committee with which of the following responsibilities would be least likely to act in the best interests of the shareholders?

A)   Corporate governance.

B)   Mergers and acquisitions.

C)   Legal matters or risk management.

D)   Takeover defense.

3.Investors have a duty to determine whether the board has properly established committees of independent board members to help carry out various board functions. Which of the following statements about the “audit committee” is FALSE?

A)   The audit committee’s chief objective is the make sure that the financial information reported is complete, accurate, relevant and timely.

B)   Firm management is responsible for hiring and supervising the independent external auditors, but the audit committee has strict oversight responsibilities.

C)   The audit committee should ensure that the audit is conducted consistent with generally accepted auditing standards (GAAS).

D)   The audit committee should ensure that the independent auditors have authority over the audit of the entire corporate group, which includes foreign subs and affiliates.

答案和详解如下：

1.Which of the following statements concerning Board committees is FALSE?

A)   The audit committee has authority over the procedures used to audit the entire corporate group including subsidiaries and affiliates.

B)   The compensation committee should consist of independent members and link executive compensation to long-term performance.

C)   Members of the audit committee should be independent experts in accounting and finance.

D)   The nominations committee is responsible for recruiting qualified board members and preparing an executive management succession plan.

The correct answer was A)

The independent auditor has authority over the audit procedures. The audit committee is responsible for hiring and supervising the independent auditor.

2.A special-purpose board committee with which of the following responsibilities would be least likely to act in the best interests of the shareholders?

A)   Corporate governance.

B)   Mergers and acquisitions.

C)   Legal matters or risk management.

D)   Takeover defense.

The correct answer was D)

A committee responsible for takeover defense would most likely be acting in the interests of the company's current management rather than in the interests of shareholders.

3.Investors have a duty to determine whether the board has properly established committees of independent board members to help carry out various board functions. Which of the following statements about the “audit committee” is FALSE?

A)   The audit committee’s chief objective is the make sure that the financial information reported is complete, accurate, relevant and timely.

B)   Firm management is responsible for hiring and supervising the independent external auditors, but the audit committee has strict oversight responsibilities.

C)   The audit committee should ensure that the audit is conducted consistent with generally accepted auditing standards (GAAS).

D)   The audit committee should ensure that the independent auditors have authority over the audit of the entire corporate group, which includes foreign subs and affiliates.

The correct answer was B)

The audit committee is responsible for hiring and supervising the independent external auditors, in order to ensure that the auditors’ priorities are consistent with the best interests of shareholders. All other statements are correct.

Among all board committees,the committee responsible for takeover,mergers and acquisitions is very comfusing.