Which of the following statements below is/are true? Statement I. Norv’s justification on his assessment that the Company is not yet at a stage that could effectively support a separate board comprised of outside directors is reasonable for Norvs and May themselves are hands-on in the oversight of their business. Statement II. The Company does not have a compensation or remuneration committee which is required per code of corporate governance. Statement III. The Company is able to attend to the concerns of the Company and make sufficient and timely decisions because its board of directors does has one regular scheduled meeting each year and have met on other occasions, as necessary. Group of answer choices Statements I and II Statements II and III Statement III only None of the statements
41.
Shelly is an internal audit manager of Air Clean and Safe Express, Inc. a publicly listed company, which provides general air conditioner cleaning and maintenance services to its industrial and residential customers. This will be the first time that the company will be audited. Thus, Shelly does not have any previous working file to review. Shelly recently conducted a preliminary interview with Mr. Norvs Gorgeous, who along with his sister, Ms. May Gorgeous owns the company.
Interview with Auditee (Independent Situation)
Shelly: Are there any issues of concern that you have regarding the audit?
Norvs: Not really. I’m proud of the company. The company to date, has no record of serious problems and has rarely had a problem with
Shelly: I understand that the company does not have an audit committee, which is typical of an organization this size. Can you tell me if the company has a board of directors and, if so, who serves on the board and how active the board is in overseeing important issues at the company?
Norvs: We do have a board of directors. It is somewhat informal, but May, I, and our partners function as directors. We do have at least one regularly scheduled meeting each year, and we have met on other occasions, as necessary. Obviously, May and I have a pretty good idea of what is happening at the company on a daily basis. We do not believe our company is yet at a stage that could effectively support a separate board comprised of outside directors. Maybe we’ll do that in a couple of years if we keep growing.
Which of the following statements below is/are true?
Statement I. Norv’s justification on his assessment that the Company is not yet at a stage that could effectively support a separate board comprised of outside directors is reasonable for Norvs and May themselves are hands-on in the oversight of their business.
Statement II. The Company does not have a compensation or remuneration committee which is required per code of corporate governance.
Statement III. The Company is able to attend to the concerns of the Company and make sufficient and timely decisions because its board of directors does has one regular scheduled meeting each year and have met on other occasions, as necessary.
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