International Accounting
5th Edition
ISBN: 9781260466492
Author: Doupnik, Timothy
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 11, Problem 6EP
To determine
Discuss the merits of having two-tiered ownership structure over single structure in addressing corporate governance issues and auditor independence.
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Which of the following is a remedy for the Agency Problem in the U.S.?
Shareholders have the right to elect the board of directors, which can serve as an effective check if the board remains independent of management.
Shareholders have the right to overrule any managerial decisions.
The U.S. government directly intervenes in company decisions to ensure shareholder interests are protected.
The board of directors should always take management roles in the company.
Providing safeguards against corruption and incompetence, removing conflict of interest, and improving perceptions of legitimacy are the arguments for:
A.
combining the roles of CEO and chairman of the board of directors
B.
separating the roles of CEO and chairman of the board of directors
C.
implementing outsourcing and offshoring to enter a foreign market
D.
implementing joint ventures and subsidiaries to enter a foreign market.
Why should multinational companies be concerned about auditing issues? Think about this in the context of an international setting and the link between auditing and corporate governance.
Chapter 11 Solutions
International Accounting
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- should corporate governance practices be included as part of legislation or is it preferable to allow organisations to self-regulate and hence, choose their own suitable corporate governance practices and structures?arrow_forwardWhile the principles of good corporate governance may be fundamentally the same for all companies, there is a scope for creativity and innovation in applying such principles to the specific circumstances facing individual companies. The challenges of implementation are for each company to identify specific issues facing a corporation and fashion out solutions that fit its circumstances. As the Director of Audit of a multinational company, what role will you play in ensuring that good corporate governance practices within the company’s operations are in line with acceptable standards?arrow_forwardDiscuss whether it would be desirable to have one model of corporate governance applicable to all countries?arrow_forward
- A study of corporate governance codes in Africa concluded that a strong stakeholder orientation prevails in the region.arrow_forwardaccording to Dalls (2004) among the framework for understanding corporate governance mechanisms in countries is the informational infrastructure that include; accounting standards, structure of the accounting/auditing profession Answer:arrow_forwardBriefly explain how an Independent and competent audit committee improves corporate governance.arrow_forward
- Which of the following does NOT form part of the objectives of a corporate governance best practice framework? Separation of chairperson and CEO roles Establishment of audit, nomination and remuneration committees O Minimisation of risk Employment of non-executive directorsarrow_forwardWhat is the purpose of having a two-tier system of boards of directors in countries such as Germany? How does the dual-board approach ameliorate the potential conflicts in the principal-agent relationship between investor and manager?arrow_forwardWhat are the advantages and disadvantages of a ‘comply or explain’ model of corporate governance?arrow_forward
- In the context of XYZ Corporation's international operations and the accounting risks associated with cultural and ethical challenges, which of the following measures would be most effective in mitigating the impact on financial reporting accuracy? A. Conducting regular training programs on cultural awareness and ethical standards for employees across all international locations. B. Ignoring cultural differences and applying a standardized set of accounting practices globally. C. Outsourcing financial reporting to third-party agencies specialized in international accounting. D. Establishing a separate financial reporting system for each country of operation to cater to local cultural norms.arrow_forwardWhich of the following statements about desirable attributes of accounting standards boards is most accurate? Accounting standards boards should: A . concede to political pressuresarrow_forward2. Agency theory is based on the view that A. The purpose of corporate governance (CG) should be to satisfy (as far as possible) the objectives of all stakeholders. B. Boards of directors are considered as important mechanism for reducing transaction costs associated with environmental interdependency. C. Corporate governance will be to employ or design techniques or systems that can secure the interests and values of the management. D. The system of CG should be designed to minimise agency problems & costs.arrow_forward
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