Practice Test Geeks(CFC) Certified Financial Controller Practice Test
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CFC Corporate Governance & Ethics Flashcards

6 cards from real CFC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CFC Corporate Governance & Ethics flashcards as text

  1. Which of the following is NOT a core principle of the OECD's Principles of Corporate Governance?

    Answer: Maximizing government tax revenue from corporations

    The OECD Principles focus on shareholder rights, equitable treatment, stakeholder roles, disclosure, board responsibilities, and governance framework — not tax revenue maximization.

  2. What is 'say on pay' and how does the Dodd-Frank Act apply it to US public companies?

    Answer: A non-binding shareholder vote on executive compensation packages, required at least every three years

    Dodd-Frank's say-on-pay provision requires US public companies to hold non-binding shareholder advisory votes on executive compensation at least every three years.

  3. Under the IMA Statement of Ethical Professional Practice, which of the following is a principle that financial professionals must uphold?

    Answer: Competence, Confidentiality, Integrity, and Credibility

    The IMA's four ethical principles for management accountants and financial professionals are Competence, Confidentiality, Integrity, and Credibility.

  4. What is the primary purpose of a company's code of conduct?

    Answer: To establish the ethical standards and behavioral expectations for all employees and representatives

    A code of conduct articulates the ethical principles, values, and behavioral standards the company expects from all personnel, serving as a guide for decision-making in ambiguous situations.

  5. A financial controller is asked by the CEO to omit a material contingent liability from the financial statements to avoid alarming investors. What is the correct response?

    Answer: Refuse and insist on proper disclosure per GAAP and SEC requirements

    GAAP (ASC 450) and SEC rules require disclosure of material contingent liabilities; complying with a request to omit them would constitute fraudulent financial reporting and expose the controller to personal liability.

  6. Which of the following best describes the role of the compensation committee in corporate governance?

    Answer: Setting and overseeing executive compensation to align management incentives with shareholder interests

    The compensation committee — composed of independent directors — designs and oversees executive pay programs to ensure they align leadership incentives with long-term shareholder value creation.