Question

Part A: 15 Multiple Choice Questions (Total: 15 marks) (1 mark for each correct answer) (Please answer MC Questions on the answer sheet provided on page 16) What is the connection between the concept of accountability and corporate governance? The board reviews poor decisions and punishes the person responsible. b. The board delegates decision making to employees but retains ultimate responsibility. Decisions are made by the person who needs to act on the decision irrespective of their position in the organisation. Board members are only accountable for decisions made by the board, The objective of the accounts receivable phase in the revenue cycle is to: ensure payments for goods and services are received on time and in correct amount. ensure payments for goods and services are correctly received, recorded and banked. ensure the accounts payable record is updated accordingly when payments for goods and services are received. ensures that payments for goods and services are made to the correct suppliers. The current eight principles for corporate governance outlined by the ASX Corporate Governance Council do not include: recognise and minimise risk. b. safeguard integrity in financial reporting c. makes timely and balanced disclosure. remunerates fairly and responsibly. 4. Which of the following is NOT a strategy level decision to be made in the expenditure cycle? b. Whether the organisation should consolidate purchases across units to obtain optimal prices. How IT can be used to improve both the efficiency and the accuracy of the inbound logistics function. Identifying where inventories and supplies should be held. Determining the optimal level of inventory and supplies to carry.

Answer 1

As a rule, only a maximum one One (1) question can be answered at a time. In case no specific question is requested (maximum 1), the first question is only answered.

Q: What is the connection between the concept of accountability and Corporate governance ?

Appropriate response: (b) The board delegates decision making to employees, but retains ultimate responsibility.

Justification: It is not possible for the board to take every single decision relating to every single activity of the business. Therefore, the decision making is delegated to the employees. However, the board require the individual employees to follow standards and guidelines. These standards and guidelines can be internally generated or external industry requirements. The Board is responsible to monitor adherence to these standards and guidelines, and thereby making the Board ultimately responsible for the decisions made.

Ruling out of other options:
(a) Corporate governance involves framing of policies or procedures that help safeguard the interest of various business stakeholders. It does not involve reviewing poor decisions and punishing the responsible persons.

(c) The corporate governance policies and guideline should provide for the persons authorized for making certain decisions. That is to say, establishing of hierarchy and providing differential rights of decision making to certain authorized personnel. Therefore, decisions cannot be made by just any person irrespective of their position in the organization.

(d) The Board is ultimately responsible for the affairs of the company. Therefore, if the corporate governance guidelines established by the board are insufficient and lacking, the board will be held responsible. Therefore, it cannot be said that the Board is responsible only for the decisions made by the board.