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Chapter 10 Corporate Governance, Notes to the Financial
Statements, and Other Disclosures Answer Key
Multiple Choice Questions
1.
Corporate governance includes concerns about:
2.
The most powerful corporate governance legislation to date has been:
3.
The Sarbanes-Oxley Act (SOX) of 2002 does not specifically prohibit an independent
auditor from performing the following non-audit function(s) for an audit client:
4.
Which of the following descriptions is not one of the "Thirteen Financial Shenanigans"
identified by Schilit and Perler, and listed in Exhibit 10-1?
5.
The notes to the financial statements:
6.
The nature and content of disclosures relate to all of the following except:
7.
Which of the following is
not
a topic that is likely to be discussed as a significant
accounting policy?
8.
The notes to the financial statements:
9.
Significant accounting policies are described in the notes to the financial statements
because:
10.
When an entity changes its accounting from one generally accepted method to another
generally accepted method:
11.
The impact of changing price levels on amounts reported in financial statements is:
12.
Management's statement of responsibility:
13.
Firms that issue registered securities are required to file, with the SEC on an annual basis,
which of the following?
14.
A firm's cash dividends were $1.98 per share of common stock for calendar 2016. In 2017,
the stock was split 3-for-1, and in 2018 a 10% stock dividend was issued. Dividends per
share for 2016, to be reported in the firm's annual report for 2018, are:
15.
Business segment information is included in the notes to financial statements because:
16.
For 2016, Skresso Co. reported $1.82 of earnings per share of common stock. During 2017,
the firm had a 4% common stock dividend. The 2016 earnings per share to be reported in
the annual report for 2017 are:
17.
Management's statement of responsibility:
18.
Which of the following is the proper paragraph sequence for an independent Auditor's
Report?
19.
A firm's independent auditors have the responsibility to:
20.
The independent auditors' report usually:
21.
An audit conducted in accordance with generally accepted auditing standards includes
each of the following
except:
22.
Which of the following requires an explanatory paragraph in the independent auditors'
report?
23.
Management's Discussion and Analysis (MD&A):
Essay Questions
24.
For the year ended December 31, 2016, Flagpole, Inc., reported earnings per share of
$4.83. During 2017, the company had a 3-for-1 stock split.
Required:
Calculate the 2016 earnings per share that will be reported in Flagpole, Inc.'s 2017 annual
report for comparative purposes.
25.
During the fiscal year ended September 30, 2017, Happster Co. had a 5-for-1 stock split.
In its annual report for 2017, the company reported earnings per share for the year ended
September 30, 2016, on a restated basis, of $0.85.
Required:
Calculate the originally reported earnings per share by Happster Co. for the year ended
September 30, 2016.
