Corporate management and the Board of Directors fulfil a vital role to ensure good corporate governance within a company. Which of the reasons, listed below, has been a major contributing factor to corporate governance scandals? Question 16 options: Changes to government regulations regarding public reporting and disclosure Shareholders have dumped the company's stock Unclear separation of ownership and management Maximizing current share holder value tends to focus on the value near term

Corporate management and the Board of Directors fulfil a vital role to ensure good corporate governance within a company. Which of the reasons, listed below, has been a major contributing factor to corporate governance scandals? Question 16 options: Changes to government regulations regarding public reporting and disclosure Shareholders have dumped the company's stock Unclear separation of ownership and management Maximizing current share holder value tends to focus on the value near term

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 3TIF

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The success of any organization heavily depends on the efficiency of the corporate governance. The only way to know the status of success or failure can be found _________________. a. None of the options b. By observing at the number of directors in the board of directors c. By providing a complete internal control report d. By looking at the financial results of the corporation
Why is corporate governance important toinvestors? Explain how each of the following isrelated to corporate governance (a) managemententrenchment, (b) hostile takeovers, (c) incentivecompensation plans, (d) greenmail, (e) poison pills,(f) strong boards of directors, (g) vesting periodsfor options, and (h) ESOPs.
Which of the following methods would be most likely to decrease the agency problems by helping motivate managers to act in the best interests of shareholders? 1. Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries. 2. Eliminate a requirement that members of the board of directors have a substantial investment in the firm's stock. 3. Decrease the use of restrictive covenants in bond agreements. 4. Take actions that reduce the possibility of a hostile takeover. 5. Elect a board of directors that allows managers greater freedom of action.
Corporate governance involves a set of relationship between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined (OECD, 2004). Using any of the defunct banks as a case study, justify how this definition is in line or deviates from good corporate governance as exhibited by the leaderships of the bank.
Which of the following factors would weaken corporate governance? A.Ensuring that the rotation of directors is such that the average incumbency ensures that all diretors are appointed for a long period so as to enhance their familiarity with the company's policies and procedures B.Stipulating the maximum number of directorship a director can commit to C.Ensuring the CEO is not the chairman of the board of directors D.The appointment of independent directors to the audit committee
Risk in the widest sense is not new to business. All companies are exposed to traditional business risks: earnings go up and down as a result of such things as changes in the business environment, in the nature of competition, in production technologies, and in factors affecting suppliers. The issue of risk has captured considerable attention from corporate management in recent years, as financial risk management has become a critical corporate activity. Regulators have also responded with new legislation, regulations, and practices that seek to improve corporate governance standards. Required: ‘Risk management is not about elimination of risk’, Discuss.
1.Assume that Management had determined that its organization’s audit committee is not effective. How do the weakness in audit committee affect management’s evaluation of internal control over financial reporting? Would an ineffective audit committee constitute a material weakness in internal control over financial reporting? State the rationale for your response. 2.Why is there a need for a corporation to maintain a comprehensive and cost-efficient communication channels to shareholders and other investors? https://t.co/T2YunPMci6 may participation of employee in corporate governance be encouraged?https://t.co/R4EZqrqGgG whom is the board of directors accountable? 5.Does good governance require absolute rules that must be adopted by all organizations? Explain.Link: https://t.co/iuDNqprARZ Subject: management, accounting
45-The success of any organization heavily depends on the efficiency of the corporate governance. The only way to know the status of success or failure can be found O a. By providing a complete internal control report O b. None of the options O c. By looking at the financial results of the corporation O d. By observing at the number of directors in the board of directors
Which of the following statements is true? a. Restrictive covenants in debt agreements are an effective way to reduce agency conflicts between stockholders and managers. b. Managers generally welcome hostile takeovers since they often increase the company’s stock price. None of the choices is correct. c. One advantage of organizing your business as a corporation is that your shareholders are not subject to limited liability. d. An effective ethics program can enhance corporate value by producing a number of positive benefits like building shareholder confidence.
Assume that the president of Freeman Industries Inc. made the following statement in the Annual Report to Shareholders: "The founding family and majority shareholders of the company do not believe in using debt to finance future growth. The founding family leamed from hard experience during Prohibition and the Great Depression that debt can cause loss of flexibility and eventual loss, corporate control. The company will not place itself at such risk. As such, all future growth will be financed either by stock sales to the public or by internally generated resources." As a public shareholder of this company, how would you respond to this policy?
Exercise 1 Below is a summary of the SEC corporate governance requirements of companies publicly-listed in the stock exchange. For each requirement, state how it is intended to help to address the risk of fraud in publicly traded organizations. a. Boards need to consist of at least 3 independent directors or 1/3 of the board which is higher. b. Boards need to hold regular executive sessions of independent directors without management present. c. Boards must have a corporate governance committee composed at least of 3 independent directors. d. The corporate governance committee must have a written charter that addresses the committee’s purpose and responsibilities, and there must be annual performance evaluation of the committee. e. Boards must have an audit committee with a minimum of three independent members. f. The audit committee must have a written charter that addresses the committee’s purpose and responsibilities, and the committee must produce an audit committee report: there…
do not copy from bartleby a) One of the objectives of a system of corporate governance is to secure the effective, sound andefficient operation of companies. This objective transcends any legislation or voluntary code.Good corporate governance embraces not only making the company prosper but also doingbusiness in a legal and ethical manner. A key element of corporate governance is the auditcommittee. The Audit Committee is a committee of the board of directors and is of a voluntarynature regulated by voluntary codes.You are required to:i) Explain how an audit committee could improve its effectiveness on internal auditor's internalcontrol review and oversight work.i) Discuss the problems associated with initiatives that been put forward to ensure independenceof members of audit committee.

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	Changes to government regulations regarding public reporting and disclosure
	Shareholders have dumped the company's stock
	Unclear separation of ownership and management
	Maximizing current share holder value tends to focus on the value near term