Test Your Finance Knowledge (Answers)

This quiz was given at CFO Rising West this week in Las Vegas, with a $250 prize going to an attendee who got all the answers right. Here are the answers. Would you have won?

1) What’s the average tenure for a Fortune 1000 CFO?

a. 4.3 years
b. 9.5 years
c. 15 years
d. 2.2 years

Answer: a.

2) What percent of Fortune 1000 CFOs are women?

a. 1.5 percent
b. 22.0 percent
c. 7.7 percent
d. 9.5 percent

Answer: c. Women, however, have outnumbered men in undergraduate and graduate accounting programs for 20 years, and comprise the majority of new hires by public accounting firms.

3) What percent of today’s Fortune 1000 CFOs have neither an MBA nor a CPA?

a. 92 percent
b. 24 percent
c. 10 percent
d. 55 percent

Answer: b. Twenty-four percent of Fortune 1000 CFOs have neither a CPA nor an MBA. In 2003, many more — 41 percent — lacked either qualification.

4)In the past four years, how many CFOs have been convicted by the Corporate Fraud Tax Force?

a. 225
b. 30
c. 10
d. 5

Answer: b. The Task Force has won convictions against a total of 200 executives, 30 of whom were CFOs.

5) How much money did the SEC collect from former Worldcom CFO Scott Sullivan in fines and restitution?

a. $13 million
b. $20 million
c. $2.2 million
d. Nothing

Answer: d. The SEC concluded Sullivan was indigent and unable to pay. If you answered a, $13 million, that’s how much he agreed to pay when he pleaded guilty. If you answered c, well, that’s the size of the trust fund, created out of one of Sullivan’s Worldcom bonuses, that his wife was allowed to keep.

6) What widespread, lawsuit-inducing substance did CFO magazine describe as the new asbestos, and the “fastest growing toxic tort” in years?

a. Yellow highlighter pen ink
b. Benzene
c. Diacetyl (popcorn butter)
d. Aspartame

Answer: b.

7) Under the latest FASB interpretation of accounting for uncertain tax positions (Fin 48), when must you recognize that your company’s tax position is uncertain?

a. When the chance of being audited is “more likely than not” (i.e., there is a greater than 50% chance it will audited)
b. When it is “reasonably likely” that the position will be audited
c. When the chance of being audited is “remote”
d. None of the above.

Answer: d. Companies must assume that the IRS will audit everything and account for any tax position that might be challenged.

8) What government agency is responsible for handling whistleblower complaints brought under the Sarbanes-Oxley Act?

a. IRS (Internal Revenue Service)
b. SEC (Securities and Exchange Commission)
c. OSHA (Occupational Safety and Health Administration)
d. DOJ (Department of Justice)

Answer: c. If you got this wrong, don’t admit it to your auditor!

9) What did Martha Stewart’s August settlement with the Securities and Exchange Commission prohibit her from doing?

a. Using a glue gun for any purpose whatsoever
b. Owning stock in her company
c. Being a CFO
d. Turning her home detention ankle bracelet into a festive napkin ring

Answer: c. Stewart was prohibited from participating in financial reporting, financial disclosure, internal controls, audits, SEC filings, and monitoring compliance with the federal securities law–in other words, the stuff CFOs usually do.

10) According to the latest figures available (2004), how many accountants and auditors are there in the U.S.?

a. 452,000
b. 10 million
c. 1.2 million
d. 2.0 million

Answer: c.

Discuss

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