Tag: Financial Accounting

The performance of Betty in her role as an executive director of Big Staffie plc for the past year is due to be evaluated in line with the requirements of the UK Corporate Governance Code.

This means that her performance will be judged in terms of?

Select ONE answer:

1. Her effectiveness of contribution and time commitment to the role
2. Her time commitment to the role only
3. Her effectiveness of contribution only
4. Neither of these

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > This is set out in principles supporting main principle B6 (effectiveness: evaluation) of the Code.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

According to the UK Corporate Governance Code, a company should seek to improve corporate governance by ensuring that?

Select ONE answer:

1. The chairman and chief executive are the same individual to avoid confusion over who has responsibility for running the company
2. The chairman and chief executive are different individuals to prevent one person having too much power within the company
3. The chairman and chief executive are different individuals in case one dies or becomes incapacitated due to ill health
4. The company chairman does not take up outside directorships

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > A company should seek to improve corporate governance by ensuring that the chairman and chief executive are different individuals to prevent one person from having unfettered powers of decision in line with main principle A2 (leadership: division of responsibilities) of the Code.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The stewardship approach to corporate governance requires directors of limited companies?

Select ONE answer:

1. To always act in the best interests of the company
2. To allow shareholders to see detailed accounting records upon request
3. To hold regular monthly meetings to answer shareholders’ questions
4. To consult the shareholders over difficult management decisions

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > The stewardship approach requires that directors should always act in the company’s best interests, not in their own. This is a resolution of the agency problem. Allowing shareholders to see detailed accounting records on request, holding monthly meetings to answer shareholders’ queries and consulting shareholders over difficult management decisions are not factors that are required by the stewardship approach, though a company can choose to enforce such procedures if it wants.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

In seeking to address the problem of the separation of ownership and control, corporate governance attempts to align the interests of which ONE of the following stakeholders?

Select ONE answer:

1. Investors
2. Employees
3. Regulators
4. Auditors

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > The separation of ownership and control refers to the classic ‘agency problem’, in which investors (shareholders) who own the company delegate to the managers (as agents) the responsibility for running the business for the ultimate benefit of the owners. Corporate governance is fundamentally concerned with ensuring that the managers act as the owners would want them to do.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Big Staffie plc adopts social responsibility as a key element in its strategies.

This will mean that the Company….. ?

Select ONE answer:

1. Seeks to meet the minimum obligations it owes to stakeholders
2. Seeks to exceed the minimum obligations it owes to stakeholders
3. Seeks to meet the minimum obligations it owes to shareholders
4. Seeks to exceed the minimum obligations it owes to shareholders

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Rather than simply looking to do the minimum required, the company will look to exceed it.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.