Which of the following are among the provisions of the Dodd-Frank Wall Street
Reform and Consumer Protection Act in relation to shareholder control of pay for top
executives?
a. The act provides that shareholders of all privately held as well as publicly traded
companies are entitled to vote and set executive compensation on a yearly basis.
b. The act provides that shareholders of public companies have an advisory vote on
company payment practices for top executives and that public companies must hold a
shareholder advisory vote on golden parachutes for executives.
c. The act provides that shareholders of all privately held as well as publicly traded
companies are entitled to vote and set executive compensation on a yearly basis and
also that the shareholders must specifically approve any golden parachute provisions for
executives.
d. Based on the belief that ill informed shareholder input negatively affected nationwide
corporate performance the act provides that shareholders need not be involved in setting
executive compensation.
Answer:
A legally astute manager would wait as long as possible to consult legal counsel once a
problem arises in order to keep legal fees to a minimum.
a. True
b. False
Answer:
Shelf registration under the Securities Act of 1933 allows registration of a number of
securities at one time for issuance later.
a. True
b. False
Answer:
The __________ Act illustrates that corporate conduct violating society’s expectations
can result in new forms of regulation without regard for feasibility or cost.
a. White-Rush Dow Jones Conciliatory
b. Dodd-Frank Wall Street Reform and Consumer Protection
c. Corporate and Securities Reform and Retribution Consumer Protection
d. Securities and Oversight
Answer:
Which of the following is true regarding compensation for hours worked under the Fair
Labor Standards Act when an employee is asked to be on standbythat is, available to
return to work while off duty?
a. If an employee is asked to be on standby, the hours spent on standby will not be
counted as hours worked if the employee is generally free to use the time for his or her
own purposes.
b. If an employee is asked to be on standby, the hours spent on standby will be counted
as hours worked for which the employee is entitled to compensation even if the
employee is generally free to use the time for his or her own purposes.
c. If an employee is asked to be on standby, the hours spent on standby will be counted
as hours worked; but the employee is only entitled to one-half of the employee’s regular
pay for those hours.
d. If an employee is asked to be on standby, the hours spent on standby will be counted
as hours worked; but the employee is only entitled to three-fourths of the employee’s
regular pay for those hours.
Answer:
An interrogatory would be a tool by attorneys in the discovery process.
a. True
b. False
Answer:
Under some circumstances a law passed by Congress may be valid even if it violates
the U.S. Constitution.
a. True
b. False
Answer:
Sampson, an accountant and auditor with ABC Accounting, was auditing XYZ
Company. Delilah, the president of XYZ Company, told Sampson that she really needed
to keep her job and that if the true condition of the company were exposed, she would
certainly be fired. She tells Sampson that she is sure she can turn things around if he
will only look help her out in the audit report. Sampson, who was infatuated with
Delilah, agreed to include inaccurate numbers in the company’s audit report knowing
that the opinion would be included in the company’s annual report on Form10-K filed
with the SEC. Unfortunately, Delilah was not able to turn the company’s performance
around, and it went into bankruptcy later that year. Sampson becomes aware that an
investigation is being conducted. Which of the following is true regarding his potential
liability?
a. Because he is a secondary actor, he cannot be found liable for the violation of any
laws involving securities although he was aware of how the audit opinion would be
used.
b. Because he is a primary actor, he can be found liable for the violation of some laws
involving securities, but not Section 10(b).
c. Because he is a primary actor, he can be found liable for a violation of Rule 10(b)
because he participated in the making of a false statement.
d. As a secondary actor, he can be found liable for the violation of Section 10(b) since
he was aware of how the audit opinion would be used.
Answer:
Legally astute management teams typically wait until later in the strategic development
to bring counsel in and evaluate legal considerations.
a. True
b. False
Answer:
The plaintiff in theThompson v. North American Stainless, LP case referenced in the
text,alleged he was fired as a retaliatory action because his finance had filed a
complaint of discrimination against their mutual employer. The employer alleged he
had no cause of action. How did the US. Supreme Court rule?
a. The case was dismissed because the man was not personally subjected to
discrimination.
b. The case was dismissed because the man was not personally subjected to
discrimination and was not married to the person discriminated against.
c. The Court ruled that the man was in the “zone of interests” andcould sue for
retaliation, but that his remedies were limited to reinstatement.
d. The Court ruled that the man was in the “zone of interests” and could sue for
retaliation without limitation to his remedies.
Answer:
Some jurisdictions permit the shareholders to amend the articles of incorporation to
relieve directors of any financial liability for violations of the duty of:
a. care.
b. loyalty.
c. avoiding self dealing.
d. voting.
Answer:
In what year did the U.S. Constitution become effective?
a. 1776
b. 1789
c. 1774
d. 1790
Answer:
When an administrative agency adopts a regulation, it becomes binding on the:
a. agency.
b. public.
c. Congress.
d. the agency and the public, but not Congress.
Answer:
C corporations are taxed as a pass-through entity.
a. True
b. False
Answer:
Which of the following is true regarding the authority of administering agencies?
a. The environmental laws give broad authority to the administering agencies to
conduct on-site inspections of plant facilities and their records.
b. The environmental laws give limited authority to the administering agencies to
conduct on-site inspections of plant facilities and their records.
c. The environmental laws give no authority to the administering agencies to conduct
on-site inspections of plant facilities and their records.
d. The environmental laws give limited authority to administering agencies to conduct
on-site inspections of plant records, but facilities may not be directly inspected by
administering agencies.
Answer:
In a criminal case, the accused is presumed innocent until proven guilty:
a. by a preponderance of the evidence.
b. by clear and convincing evidence.
c. beyond a reasonable doubt.
d. by a preponderance of the evidence for some offences and beyond a reasonable doubt
for others.
Answer:
Which of the following are protected categories under the Equal Credit Opportunity
Act?
a. Gender, race, color, religion, and national origin
b. Gender, race, color, religion, national origin, and age
c. Gender, marital status, race, color, religion, national origin, and age
d. Gender, marital status, race, color, religion, national origin, age, and residents of
disadvantaged neighborhoods
Answer:
A misdemeanor is a crime punishable by a fine or a jail sentence of one year or less.
a. True
b. False
Answer:
A key step in preparing the registration statement is the process of __________,
whereby the company, the underwriters, and their respective counsel assemble and
review the information about the company in the registration statement.
a. due diligence
b. reasonable review
c. strict scrutiny
d. proofing
Answer:
Administrative agencies have subpoena power to make mandatory requests for
information.
a. True
b. False
Answer:
When disputes arise, most western European countries use the “American rule”
whereby each party, win or lose, generally pays its own attorney fees.
a. True
b. False
Answer:
State may regulate odometer tampering, but there is no federal law that does so.
a. True
b. False
Answer:
Under the __________ a corporate officer may be found guilty of a crime if she bore a
“__________” to a violation of a statute dealing with “products that may affect the
__________.”
a. Responsible Corporate Officer doctrine, responsible relation, health of consumers
b. Direct Liability doctrine, responsible relation, health of consumers
c. Vicarious Liability doctrine, responsible relation, health of consumers
d. Responsible corporate officer doctrine, supervisory relation, privacy of consumers
Answer:
A few years ago Bernice purchased some medication through her veterinarian for her
aging pet iguana, Scales, who had a skin disease. Scales died a few months after
beginning the medication. At the time of the death, Bernice thought that Scales had died
of natural causes. She just read in the newspaper, however, that a number of reptilian
type animals had been harmed by the drug Scales ingested. Bernice immediately talked
to her veterinarian who told her that while she now believes the medication was
harmful to Scales, it was manufactured by a number of different manufacturers, and
there is no way to determine the exact manufacturer of the medication given to Scales.
Which of the following is Bernice’s best chance at recovery?
a. Market-share liability
b. Joint and several liability
c. Product-line theory
d. Continuity theory
Answer:
Which of the following would a comment letter to an agency generally NOT contain?
a. Identification of the person concerned
b. An explanation of why the person making the comment is concerned
c. A suggestion of a specific change to the rule along with factual information to
support the position asserted
d. An itemization of expected damages
Answer:
When filing a new lawsuit, the person (or company) is called the __________ and the
documentation is called the __________.
a. plaintiff, summons
b. plaintiff, complaint
c. respondent, service of process
d. defendant, prayer
Answer:
Any corporation not meeting the requirements for an S corporation is automatically a C
corporation.
a. True
b. False
Answer:
The Americans with Disabilities Act places requirements on employers regarding
accommodating the disabled but does not address accessibility to commercial facilities.
a. True
b. False
Answer:
Which of the following is true regarding situations in which an agent enters into a
contract without authority?
a. The principal is not bound nor is the agent bound.
b. The principal is bound and the agent may be personally liable.
c. The principal is not bound, but the agent may personally liable.
d. Neither the principal nor the agent is bound if the contract is oral; but if the contract
is written, both the principal and agent are bound.
Answer:
To which of the following does the statute of frauds apply?
a. A promise to pay the debt of another person
b. A contract that cannot be performed within the space of six months
c. Any contract of employment
d. Any contract involving commerce
Answer:
Molly runs the best dog grooming shop in town. All the dogs love her, as do the owners.
She is particularly popular because of a special type of dog biscuit she gives for treats
that provides such energy that owners have been known to try them too. Slowly but
surely all the other dog grooming shops start to go out of business. Molly claims
surprise when one day she is charged with unlawfully monopolizing the dog grooming
business. Which of the following would be her best defense?
a. That she primarily provided biscuits, not grooming.
b. That she did not intentionally obtain monopoly power or retain it through
anticompetitive acts.
c. That she did not intentionally obtain monopoly power, and that it was legally
acceptable for her to willfully attempt to keep it.
d. That services, not goods, were involved.
Answer:
Based on the text, if employees sue a company who transmits theirnames and Social
Security numbers to managers in the company in an unsecured manner, how might a
court rule? (See theBodah v. Lakeville Motor Express, Inc. case.)
a. The court might rule that a publication occurred and that the employees could
proceed with a cause of action based on invasion of privacy.
b. The court might rule thatthe employees had no right to privacy in relation to
distribution of social security numbers because the numbers are issued by the
government.
c. The court might rule that the employees could not proceed with an action for invasion
of privacy because no publication of the information at issue occurred.
d. The court might rulethat the employees could not proceed with an action for invasion
of privacy because health information was not involved.
Answer:
Section 16(a) of the 1934 Act requires that officers, directors, and greater-than-10
percent shareholders of companies that have registered any class of equity securities
under the 1934 Act file __________ reports with the SEC and with an national
securities exchange on which their company’s equity securities are listed.
a. actual ownership
b. beneficial ownership
c. insider ownership
d. listed stock
Answer: