Cgsr Quiz
Quiz By "HighQ - The HR Club". Wish You Luck
Questions and Answers
- 1.
The framework for establishing good corporate governance and accountability was originally set up by the
- A.
Thornton Committee
- B.
Rowntree Committee
- C.
Cadbury Committee
- D.
Nestlé Committee
Correct Answer
C. Cadbury CommitteeExplanation
The Cadbury Committee is the correct answer because it is well-known for its significant contribution to establishing good corporate governance and accountability. The committee was formed in the UK in 1991, following a series of corporate scandals, with the aim of addressing issues such as directorial responsibilities, financial reporting, and the role of auditors. The committee's recommendations resulted in the Cadbury Report, which became a widely recognized and influential document in the field of corporate governance. Its recommendations emphasized the importance of transparency, accountability, and ethical behavior, and have since been adopted and adapted by many organizations globally.Rate this question:
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- 2.
Which of the following is not one of the underlying principles of the corporate governance Combined Code of Practice?
- A.
Integrity
- B.
Accountability
- C.
acceptability
- D.
Openness
Correct Answer
C. acceptabilityExplanation
The underlying principles of the corporate governance Combined Code of Practice include integrity, accountability, and openness. However, acceptability is not one of the principles. This means that the code does not prioritize or emphasize acceptability as a fundamental principle for corporate governance.Rate this question:
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- 3.
External audit of the accounts of a limited company is required
- A.
Because it is demanded by the company’s bankers
- B.
By the Companies Act 2013
- C.
By SEBI rules
- D.
At the discretion of the shareholders
Correct Answer
B. By the Companies Act 2013Explanation
The correct answer is "by the Companies Act 2013". The Companies Act 2013 is a legislation that governs the functioning and regulations of companies in India. According to this act, it is mandatory for a limited company to conduct an external audit of its accounts. This requirement ensures transparency and accountability in the financial reporting of companies, and helps to protect the interests of stakeholders such as shareholders, creditors, and employees. Therefore, the Companies Act 2013 makes it necessary for a limited company to undergo an external audit.Rate this question:
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- 4.
A company may become insolvent if it
- A.
Has negative working capital
- B.
Makes a loss
- C.
cannot pay creditors in full after realisation of its assets
- D.
Cannot meet its budgeted level of profit
Correct Answer
C. cannot pay creditors in full after realisation of its assetsExplanation
If a company is unable to pay its creditors in full after selling off its assets, it indicates that the company does not have enough funds to cover its debts. This inability to meet its financial obligations suggests that the company may be insolvent. Insolvency occurs when a company's liabilities exceed its assets, making it unable to pay its debts. Thus, the given answer accurately describes a situation that could lead to a company becoming insolvent.Rate this question:
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- 5.
According to Companies Act 2013, it is mandatory to have atleast how many woman directors on the Board ?
- A.
2
- B.
3
- C.
1
- D.
0
Correct Answer
C. 1Explanation
According to the Companies Act 2013, it is mandatory to have at least one woman director on the Board. This requirement is aimed at promoting gender diversity and ensuring representation of women in decision-making positions within companies.Rate this question:
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- 6.
A director of a limited company may not be liable for wrongful trading if he or she
- A.
Introduced into the balance sheet an asset based on a valuation of its brands sufficient to meet any shortfall
- B.
took every step to minimise the potential loss to creditors
- C.
Increased the valuation of its inventories to cover any potential shortfall
- D.
Brought in some expected sales from next year into the current year
Correct Answer
B. took every step to minimise the potential loss to creditorsExplanation
The correct answer is "took every step to minimise the potential loss to creditors." This means that the director must have actively taken measures to reduce the potential loss that creditors may face. By doing so, the director is demonstrating responsibility and a commitment to protecting the interests of the company's creditors.Rate this question:
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- 7.
Which of the following actions will not help directors to protect themselves from non-compliance with their obligations and responsibilities?
- A.
including a disclaimer clause in their service contracts
- B.
Seeking professional help
- C.
Keeping themselves fully informed about company affairs
- D.
Ensuring that regular management accounts are prepared by the company
Correct Answer
A. including a disclaimer clause in their service contractsExplanation
Including a disclaimer clause in their service contracts will not help directors to protect themselves from non-compliance with their obligations and responsibilities. A disclaimer clause is a statement that attempts to limit or exclude liability for certain actions or omissions. However, directors cannot simply absolve themselves of their legal duties and responsibilities through a disclaimer clause in their contracts. Directors are still required to fulfill their obligations and responsibilities, and they can be held accountable for non-compliance regardless of any disclaimers in their contracts. Therefore, including a disclaimer clause will not provide protection against non-compliance.Rate this question:
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- 8.
All definitions of Corporate Social Responsibility recognize that:
- A.
The natural environment should be the main focus of CSR activities.
- B.
Companies have a responsibility for their impact on society and environment.
- C.
Business ethics is a complex issue.
- D.
Companies must pay equal attention to business ethics and sustainability.
Correct Answer
B. Companies have a responsibility for their impact on society and environment.Explanation
All definitions of Corporate Social Responsibility recognize that companies have a responsibility for their impact on society and the environment. This means that companies should not only focus on their financial performance but also consider the social and environmental consequences of their actions. They should strive to minimize any negative impact they may have on society and the environment and actively contribute to their improvement. This includes being accountable for their actions, promoting ethical behavior, and implementing sustainable practices. By fulfilling this responsibility, companies can contribute to the overall well-being of society and the preservation of the natural environment.Rate this question:
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- 9.
Sarbanes-Oxley Act of 2002 contains provisions regarding
- A.
Control of the company affairs.
- B.
Financial disclosures and investor protection.
- C.
Listing of companies on stock exchange.
- D.
None of the above.
Correct Answer
B. Financial disclosures and investor protection.Explanation
The Sarbanes-Oxley Act of 2002 is a legislation enacted in response to accounting scandals such as Enron and WorldCom. It aims to improve corporate governance and enhance the accuracy and reliability of financial disclosures. The Act includes provisions that require companies to establish internal controls, conduct regular audits, and provide accurate and timely financial statements. It also aims to protect investors by increasing transparency, imposing stricter regulations on corporate officers, and enhancing penalties for fraudulent activities. Therefore, the correct answer is financial disclosures and investor protection.Rate this question:
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- 10.
What are the four generic strategies of social responsiveness?
- A.
Reaction, Defence, Accommodation, Proaction
- B.
Reaction, Defence, Investment, Withdrawal
- C.
Reaction, Defence, Reinvestment, Proaction
- D.
Proaction, Defensive, Reinvestment, Reaction
Correct Answer
A. Reaction, Defence, Accommodation, ProactionExplanation
The four generic strategies of social responsiveness are reaction, defense, accommodation, and proaction. Reaction refers to responding to social issues only when they arise. Defense involves denying responsibility for social issues. Accommodation means accepting responsibility for social issues and taking appropriate action. Proaction involves actively seeking to address social issues before they become problems.Rate this question:
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- 11.
Opportunities for social innovation are greatest when:
- A.
CSR is aligned with a firm's core skills and capabilities.
- B.
CSR spending of a firm is larger than that of its competitors.
- C.
CSR is pursued by a firm to improve its reputation.
- D.
CSR is pursued by a firm to enhance human capital.
Correct Answer
A. CSR is aligned with a firm's core skills and capabilities.Explanation
The correct answer is that opportunities for social innovation are greatest when CSR is aligned with a firm's core skills and capabilities. This means that when a company uses its unique strengths and expertise to address social issues, it is more likely to create meaningful and sustainable impact. This approach allows the company to leverage its resources effectively and make a difference in areas where it has the most expertise and potential for innovation.Rate this question:
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- 12.
What are the three levels of innovation?
- A.
In-market innovation, new market creation, leadership
- B.
New product creation, new market creation, leadership
- C.
New product creation, new market creation, new reputation
- D.
New product creation, new market creation, pioneering
Correct Answer
A. In-market innovation, new market creation, leadershipExplanation
The three levels of innovation are in-market innovation, new market creation, and leadership. In-market innovation refers to the improvement and enhancement of existing products or services to meet the changing needs and demands of customers. New market creation involves identifying and entering untapped markets or creating entirely new markets for products or services. Leadership refers to being at the forefront of innovation, setting trends, and being recognized as a thought leader in the industry.Rate this question:
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- 13.
The primary stakeholders are
- A.
Shareholders
- B.
Customers
- C.
Suppliers
- D.
Creditors
Correct Answer
A. ShareholdersExplanation
The primary stakeholders in a business are the individuals or groups that have a direct interest or are affected by the company's operations. Shareholders are considered primary stakeholders because they own shares in the company and therefore have a financial interest in its success. Customers, suppliers, and creditors are also important stakeholders, but they are not considered primary stakeholders as they do not have direct ownership in the company.Rate this question:
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- 14.
An independent director is one who:
- A.
Does not have any other relationships with the company other than his or her directorship
- B.
Does not have outside relationships with other directors
- C.
Did not attend a school supported by the company
- D.
All of the above
Correct Answer
A. Does not have any other relationships with the company other than his or her directorshipExplanation
An independent director is someone who does not have any other relationships with the company other than their directorship. This means that they do not have any financial or personal interests in the company that could potentially compromise their objectivity and independence in decision-making. They are not influenced by any outside relationships with other directors or any educational affiliations with the company. Being independent ensures that the director can provide unbiased and objective judgment in the best interest of the company and its stakeholders.Rate this question:
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- 15.
Is a nominee director independent too?
- A.
Yes
- B.
No
Correct Answer
B. NoExplanation
A nominee director is not independent because they are appointed by a shareholder or another director to represent their interests on the board. They are typically not chosen based on their independence or impartiality, but rather to act as a representative or agent for the appointing party. Therefore, a nominee director is not considered independent.Rate this question:
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