Which of the Following Was Not a Finding of the Cadbury

question 42

Multiple Choice

Which of the following was not a finding of the Cadbury Commission?

• A) Audit and compensation committees should be made up entirely of independent directors or, at least, have a majority of them.
• B) Auditors should be rotated, and there should be fuller disclosure of non-audit work.
• C) The CEO should not be chairman of the board, and at the very least there should be a lead independent director with similar agenda-setting powers.
• D) The CEO and the CFO should personally attest to the accuracy of the financial statements presented to shareholders.

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Definitions:

Actual Value

The real value observed or measured, as opposed to an estimated or theoretical value.

Sample Mean

is the average value of a subset of observations from a larger population.

Sample Variance

Sample variance is a measure of the dispersion or variability of a sample dataset, calculating how much the numbers differ from the sample mean.

Consistent

A statistical property indicating that as the size of the sample increases, the estimator converges in probability to the parameter being estimated.