McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce in Finance (B.Com Finance) .
| 101. |
Codes of conduct and codes of ethics |
| A. | are formal statements that describe what an organization expects of its employees. |
| B. | become necessary only after a company has been in legal trouble. |
| C. | are designed for top executives and managers, not regular employees. |
| D. | rarely become an effective component of the ethics and compliance program. |
| Answer» A. are formal statements that describe what an organization expects of its employees. | |
| 102. |
Which of the following is NOT one of the primary elements of a strong organizational compliance program? |
| A. | A written code of conduct |
| B. | An ethics officer |
| C. | Significant financial expenditures |
| D. | A formal ethics training program |
| Answer» C. Significant financial expenditures | |
| 103. |
______________ are standards of behaviour that groups expect of their members. |
| A. | Codes of conduct. |
| B. | Group values. |
| C. | Group norms. |
| D. | Organizational norms. |
| Answer» C. Group norms. | |
| 104. |
In a ______________ organization, decision making is delegated as far down the chain of command as possible. |
| A. | Decentralized |
| B. | Creative |
| C. | Flexible |
| D. | Centralized |
| Answer» D. Centralized | |
| 105. |
____________ refers to a strategic process involving stakeholder assessment to create long-term relationships with customers, while maintaining, supporting, and enhancing the natural environment. |
| A. | Eco-strategy |
| B. | Green marketing |
| C. | Superfund reauthorization |
| D. | Recycle and reprocess management |
| Answer» B. Green marketing | |
| 106. |
The hand-of-government refers to the |
| A. | ability of the government to interfere in business negotiations |
| B. | role of corporations to be profitable within the law |
| C. | effect of national politics on business decisions |
| D. | impact of changing government regulations |
| Answer» B. role of corporations to be profitable within the law | |
| 107. |
An organisation's obligation to act to protect and improve society's welfare as well as its own interests is referred to as |
| A. | organisational social responsibility |
| B. | organisational social responsiveness |
| C. | corporate obligation |
| D. | business ethics |
| Answer» A. organisational social responsibility | |
| 108. |
The view that business exists at society's pleasure and businesses should meet public expectations of social responsibility is the |
| A. | iron law of responsibility argument |
| B. | enlightened self-interest argument |
| C. | capacity argument |
| D. | anti-freeloader argument |
| Answer» B. enlightened self-interest argument | |
| 109. |
Managerial ethics can be characterised by all of the following levels except |
| A. | immoral management |
| B. | amoral management |
| C. | demoral management |
| D. | moral management |
| Answer» C. demoral management | |
| 110. |
Which of the following is not one the underlying principles of the corporate governance Combined Code of Practice? |
| A. | Openness |
| B. | Integrity |
| C. | Accountability |
| D. | acceptability |
| Answer» D. acceptability | |
| 111. |
External audit of the accounts of a limited company is required |
| A. | because it is demanded by the company’s bankers |
| B. | by the Companies Act 2006 |
| C. | at the discretion of the shareholders |
| D. | to detect fraud |
| Answer» B. by the Companies Act 2006 | |
| 112. |
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 |
| Answer» C. a duty to propose high dividends for shareholders | |
| 113. |
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 |
| Answer» D. cannot pay creditors in full after realisation of its assets | |
| 114. |
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 |
| Answer» A. took every step to minimise the potential loss to creditors | |
| 115. |
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 |
| Answer» D. a civil and a criminal offence committed by any employee | |
| 116. |
Disqualification of directors may result from breaches under the |
| A. | Sale of Goods Act 1979 |
| B. | Financial Services Act 1986 |
| C. | Companies Act 2006 and Insolvency Act 1986 |
| D. | Health and Safety at Work Act 1974 |
| Answer» C. Companies Act 2006 and Insolvency Act 1986 | |
| 117. |
Directors may not be disqualified for |
| A. | continuing to trade when the company is insolvent |
| B. | persistent breaches of company legislation |
| C. | paying inadequate attention to the company finances |
| D. | being convicted of drunken driving |
| Answer» D. being convicted of drunken driving | |
| 118. |
Which of the following actions will not help directors to protect themselves from noncompliance with their obligations and responsibilities? |
| A. | keeping themselves fully informed about company affairs |
| B. | ensuring that regular management accounts are prepared by the company |
| C. | seeking professional help |
| D. | including a disclaimer clause in their service contracts |
| Answer» D. including a disclaimer clause in their service contracts | |
| 119. |
Co-ording to Cadbury (2002), corporate governance is an issue of power and: |
| A. | Rights |
| B. | Accountability |
| C. | Profit |
| D. | Appropriability |
| Answer» B. Accountability | |
| 120. |
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 |
| Answer» A. Ownership and control is separated | |
| 121. |
The Institute of Chartered Accountants in England and Wales considers argue that one particular stakeholder group should have primacy over all other groups. Which stakeholder group are they referring to? |
| A. | Customers |
| B. | Managers |
| C. | Shareholders |
| D. | Society |
| Answer» C. Shareholders | |
| 122. |
An organization that is owned by shareholders but managed by agents on their behalf is conventionally known as the modern: |
| A. | Conglomerate |
| B. | Corporation |
| C. | Company |
| D. | Firm |
| Answer» B. Corporation | |
| 123. |
The modern corporation has four characteristics. These are limited liability, legal personality, centralized management and: |
| A. | Fiduciary duty |
| B. | Stakeholders |
| C. | Shareholders |
| D. | Transferability |
| Answer» D. Transferability | |
| 124. |
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 |
| Answer» A. If the members of a corporation die, the corporation remains in existence providing it has capital | |
| 125. |
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 |
| Answer» C. Not equally transparent to all stakeholders | |
| 126. |
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 |
| Answer» C. Stakeholder theory | |
| 127. |
Where an organization takes into account the effect its strategic decisions have on society, this is known as: |
| A. | Corporate governance |
| B. | Business policy |
| C. | Business ethics |
| D. | Corporate social responsibility |
| Answer» D. Corporate social responsibility | |
| 128. |
Which intervention resulted from the Enron scandal? |
| A. | The Hampel Committee |
| B. | The Sarbannes-Oxley Act |
| C. | The Greenbury Committee |
| D. | The Cadbury Committee |
| Answer» B. The Sarbannes-Oxley Act | |
| 129. |
Executive pay in the UK was reviewed by: |
| A. | The Greenbury Committee |
| B. | The Hampel Committee |
| C. | The Cadbury Committee |
| D. | The Higgs Committee |
| Answer» A. The Greenbury Committee | |
| 130. |
In Japan, some corporations operate within the philosophy of 'kyosei'. The term 'kyosei' means: |
| A. | No man shall be richer than another man |
| B. | All stakeholders are equal |
| C. | Living and working for the common good |
| D. | If the corporation is bad, society is bad |
| Answer» C. Living and working for the common good | |
| 131. |
When managerial self-dealings are excessive and left unchecked, |
| A. | they can have serious negative effects on share values |
| B. | they can impede the proper functions of capital markets. |
| C. | they can impede such measures as GDP growth. |
| D. | all of the above |
| Answer» D. all of the above | |
| 132. |
Corporate governance structure |
| A. | varies a great deal across countries. |
| B. | has become homogenized following the integration of capital markets. |
| C. | has become homogenized due to cross-listing of shares of many public corporations. |
| D. | none of the above |
| Answer» A. varies a great deal across countries. | |
| 133. |
In a public company with diffused ownership, the board of directors is entrusted with |
| A. | monitoring the auditors and safeguarding the interests of shareholders. |
| B. | monitoring the shareholders and safeguarding the interests of management. |
| C. | monitoring the management and safeguarding the interests of shareholders. |
| D. | none of the above |
| Answer» C. monitoring the management and safeguarding the interests of shareholders. | |
| 134. |
The key weakness of the public corporation is |
| A. | too many shareholders, which makes it difficult to make corporate decision. |
| B. | relatively high corporate income tax rates. |
| C. | conflicts of interest between managers and shareholders. |
| D. | conflicts of interests between shareholders and bondholders. |
| Answer» C. conflicts of interest between managers and shareholders. | |
| 135. |
When company ownership is diffuse, |
| A. | a "free rider" problem discourages shareholder activism. |
| B. | the large number of shareholders ensures strong monitoring of managerial behavior because with a large enough group, there's almost always someone who will to incur the costs of monitoring management. |
| C. | few shareholders have a strong enough incentive to incur the costs of monitoring management. |
| D. | both a) and c) are correct |
| Answer» D. both a) and c) are correct | |
| 136. |
In many countries with concentrated ownership |
| A. | the conflicts of interest between shareholders and managers are worse than in countries with diffuse ownership of firms. |
| B. | the conflicts of interest are greater between large controlling shareholders and small outside shareholders than between managers and shareholders. |
| C. | the conflicts of interest are greater between managers and shareholders than between large controlling shareholders and small outside shareholders. |
| D. | corporate forms of business organization with concentrated ownership are rare. |
| Answer» B. the conflicts of interest are greater between large controlling shareholders and small outside shareholders than between managers and shareholders. | |
| 137. |
In what country do the three largest shareholders control, on average, about 60 percent of the shares of a public company? |
| A. | United States |
| B. | Canada |
| C. | Great Britain |
| D. | Italy |
| Answer» D. Italy | |
| 138. |
The public corporation |
| A. | is jointly owned by a (potentially) large number of shareholders. |
| B. | offers shareholders limited liability. |
| C. | separates the ownership and control of a firm's assets. |
| D. | all of the above |
| Answer» D. all of the above | |
| 139. |
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 |
| Answer» B. A method of fostering ethics | |
| 140. |
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 |
| Answer» A. May be desirable in some circumstances | |
| 141. |
The reach of codes is |
| A. | Restricted to those obliged to conform by virtue of membership |
| B. | Applicable to all |
| C. | Applicable to the public only |
| D. | the same as the reach of the law |
| Answer» A. Restricted to those obliged to conform by virtue of membership | |
| 142. |
East India Company |
| A. | Was always a management agency for the British government |
| B. | had a continuous trade monopoly until 1873 |
| C. | Went out of existence at the time of Indian independence |
| D. | Largely set commercial and management practices for India |
| Answer» D. Largely set commercial and management practices for India | |
| 143. |
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 |
| Answer» C. Both A and B | |
| 144. |
When communicating a code of conduct |
| A. | Focus on values that should guide decision making |
| B. | Provide the same code of conduct to all departments regardless of its length. |
| C. | Refrain from changing the code of conduct regularly |
| D. | Fewer employees will read the code if it is short |
| Answer» A. Focus on values that should guide decision making | |
| 145. |
The __________ approach to formal corporate ethics initiatives is proactive and inspirational. |
| A. | Rules |
| B. | Compliance |
| C. | Principles |
| D. | Values |
| Answer» D. Values | |
| 146. |
The _________ approach to formal corporate ethics initiatives focuses on meeting required behavior norms or obeying the letter of the law |
| A. | Rules |
| B. | Compliance |
| C. | Principles |
| D. | Values |
| Answer» B. Compliance | |
| 147. |
Which of the following is associated with the classical view of social responsibility? |
| A. | economist Robert Reich |
| B. | concern for social welfare |
| C. | stockholder financial return |
| D. | voluntary activities |
| Answer» C. stockholder financial return | |
| 148. |
How many stages are in the model of an organization social responsibility progression? |
| A. | 3 |
| B. | 4 |
| C. | 5 |
| D. | 6 |
| Answer» B. 4 | |
| 149. |
The belief that a firm pursuit of social goals would give them too much power is known as what argument in opposition to a firm being socially responsible? |
| A. | Costs |
| B. | lack of skills |
| C. | lack of broad public support |
| D. | too much power |
| Answer» D. too much power | |
| 150. |
Social obligation is the obligation of a business to meet its _______________. |
| A. | social and technological responsibilities |
| B. | economic and legal responsibilities |
| C. | technological and economic responsibilities |
| D. | economic and social responsibilities |
| Answer» B. economic and legal responsibilities | |
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