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Question 01

The London stock exchange's regulations are contained in a publication known as:

a) the Yellow Book.

b) the Green Book.

c) the Red Book.

d) the Blue Book.

Question 02

The role of an auditor is to:

a) check every financial transaction.

b) report to the directors whether the financial statements show a 'true and fair view'.

c) report to the shareholders whether the financial statements show a 'true and fair view'.

d) make it impossible for fraud to take place.

Question 03

A statutory audit is performed by:

a) an independent qualified accountant or firm of accountants.

b) a qualified accountant employed by the company being audited.

c) the financial director of the company being audited.

d) an official appointed by the government .

Question 04

A long-established company held its last AGM on 1 January 2004. What is the last date for holding its next AGM?

a) 1 January 2006

b) 1 January 2005

c) 31 December 2005

d) 1 April 2005

Question 05

In connection with general meetings, what is a 'proxy'?

a) The name given to the person who counts the votes cast by shareholders

b) The requirement for shareholders to attend the meeting to cast their votes

c) The box in which shareholders' votes are collected

d) The means whereby shareholders can vote without actually attending the meeting

Question 06

An extraordinary general meeting is:

a) a name given to an unofficial company meeting.

b) an AGM which has insufficient shareholders in attendance.

c) any official meeting of shareholders other than the AGM.

d) an ordinary general meeting that has to continue beyond the scheduled closing time.

Question 07

Which one of the following gives an objective overview to help the user of an annual report gain an understanding of the financial circumstances of the business:

a) operating and financial review.

b) auditors' report.

c) directors' report.

d) financial summary.

Question 08

Which one of the following most accurately describes the role of a 'non-executive' director?

a) A former director of the company, now retired

b) A member of the Board of Directors who does not take an active role in managing the company but is appointed for his or her objectivity in considering the company's affairs, and wide experience of business

c) A member of the Board of Directors who takes no part in the company's affairs

d) A member of the Board of Directors who takes an active role in managing the company

Question 09

Which one of the following statements is not contained within a published annual report?

a) Cash flow statement

b) Profit and loss account

c) Internal auditor's report

d) Balance sheet

Question 10

'Financial highlights' provided by companies should be viewed with caution because:

a) they are always inaccurate.

b) they are not audited.

c) they give too much information.

d) they cover too long a period.

Oxford University Press, Online Resource Centre, Chapter 11.

Chapter 11

Instructions