Question 2 (i) Which one of the following statements is true? A. Conflicts of interests between management and stakeholders can result in bankruptcies or major frauds. B. It is the responsibility of...

Question 2

(i) Which one of the following statements is true?
A. Conflicts of interests between management and stakeholders can result in
bankruptcies or major frauds.
B. It is the responsibility of internal audit to design and monitor controls that reasonably
assure that objectives are met.
C. Corporate governance addresses the principal–agent relationship between
management and directors on the one hand and the relationship between the company
and suppliers on the other.
D. The management board approves the mission, vision, objectives and strategy of the
entity.

(ii) The agency theory stipulates that:
A. Self-interest plays no role and is irrelevant.
B. The management board is the agent.
C. The management board is the principal.
D. Information asymmetry is absent in corporate governance.

(iii) Which of the following is not something performed by the company’s board?
A. Day to day supervision of the sales manager.
B. Appoints the corporate officers responsible for managing the company and
implementing this strategy
C. Oversees management and ensures the quality of information provided to
shareholders and to financial markets through the financial statements.
D. Defines the company’s strategy.

(iv) What is meant by the 'separation of ownership and control?'
A. That the owners of companies have become separated from those who control
companies.
B. That the law should seek to keep the owners and controllers of company apart in order
to avoid an over-concentration of power.
C. That owners and controllers of companies should not act in concert to defeat
resolutions.
D. That those who control the company should be separate to those who own it.