Top 80+ Solved Corporate Governance and Business Ethics MCQ Questions Answer
Q. Directors’ responsibilities are unlikely to include.
a. a fiduciary duty
b. a duty to keep proper accounting records
c. a duty to propose high dividends for shareholders
d. a duty of care
Q. A company may become insolvent if it
a. has negative working capital
b. cannot meet its budgeted level of profit
c. makes a loss
d. cannot pay creditors in full after realisation of its assets
Q. A director of a limited company may not be liable for wrongful trading if he or she
a. took every step to minimise the potential loss to creditors
b. increased the valuation of its inventories to cover any potential shortfall
c. introduced into the balance sheet an asset based on a valuation of its brands sufficient to meet any shortfall
d. brought in some expected sales from next year into the current year
Q. Fraudulent trading may be
a. a civil offence committed by any employee
b. a criminal offence committed only by directors of a limited company
c. a civil and a criminal offence committed only by directors of a limited company
d. a civil and a criminal offence committed by any employee
Q. The OECD argues that corporate governance problems arise because:
a. Ownership and control is separated
b. Managers always act in their own self interest
c. Profit maximization is the main objective of organizations
d. Stakeholders have differing levels of power
Q. An organization that is owned by shareholders but managed by agents on their behalf isconventionally known as the modern:
a. Conglomerate
b. Corporation
c. Company
d. Firm
Q. The modern corporation has four characteristics. These are limited liability, legal personality,centralized management and:
a. Fiduciary duty
b. Stakeholders
c. Shareholders
d. Transferability
Q. What makes a corporation distinct from a partnership?
a. If the members of a corporation die, the corporation remains in existence providing it has capital
b. If the members of a corporation die, the corporation ceases to exist
c. A corporation cannot own property
d. A corporation cannot be held responsible for the illegal acts of its employees
Q. The term 'asymmetry of information' means information in a corporation is:
a. Transferable to all stakeholders
b. Not transferable to all stakeholders
c. Not equally transparent to all stakeholders
d. Equally transparent to all stakeholders
Q. The view that sees profit maximization as the main objective is known as:
a. Shareholder theory
b. Principal-agent problem
c. Stakeholder theory
d. Corporation theory
Q. Where an organization takes into account the effect its strategic decisions have on society, thisis known as:
a. Corporate governance
b. Business policy
c. Business ethics
d. Corporate social responsibility
Q. Which intervention resulted from the Enron scandal?
a. The Hampel Committee
b. The Sarbannes-Oxley Act
c. The Greenbury Committee
d. The Cadbury Committee
Q. Periodic ethics audits
a. Are required by the Indian stock exchange
b. A method of fostering ethics
c. A method of quantitative assessment
d. Always use external consultants
Q. Political intrusion into business
a. May be desirable in some circumstances
b. Is anathema
c. Politics should have no say in how business is conducted
d. state legislation over-rides Federal Legislation
Q. Quantification in ethics may be done by
a. Putting monetary value on prospective actions
b. Comparing the value of one action with another
c. Both A and B
d. Neither A or B