Question

answer both please

38 a) The corporate governance component of ERM has received increased importance due to the passage of the ___ Act in the U.S.

Select one:
a. Bank Secrecy
b. JOBS
c. Sarbanes Oxley
d. Homeland Security

38 b)Which of the following would be an example of a firm's liquidity risk?

Select one:
a. the probability the firm will be turned down for a bank loan
b. the probability for the firm to collect payment from its accounts payable
c. the probability for the firm to pay its monthly notes and accounts payable
d. the probability the firm will fail to comply with a government regulation

Answer 1

Sarbanes Oxley act of 2002 was enacted to protect investors from fraudulent financial reporting practices by corporations. Thus it acted as an enterprise wide solution for corporate governance.

Answer is c. Sarbanes Oxley

Liquidity risks deal with risk to day to day cash position arising out of operations and working capital management. Short term debt management is a part of working capital management and deals with liquidity risk.

Answer is c. the probability for the firm to pay its monthly notes and accounts payable