Question

Question 23 (2 points) Ethical values of a company is important in creating an ethical culture within the company. True False Question 24 (2 points) Which of the following statements is true of the agency problem facing the modern public corporation? It arises as a consequence of the separation of ownership and control in the corporation It arises when a corporation hires a private agency to conduct audits of its business practices. It arises when a government agency is assigned with the task of identifying corrupt practices by a corporation. It arises as a consequence of the managers of the corporation focusing on enhancing shareholder value.

Answer 1

Ethical values of a company are important in creating an ethical culture within the company.

• True

Reason: Ethical values determine the policies and practices of a company, which in turn have a significant impact on the culture of the company.

Which of the following statement is true of the agency problem facing the modern public corporation?

• It arises as a consequence of the separation of ownership and control in the corporation.

Reason: Agency problem usually refers to a conflict of interest between a company's management and the company's stockholders, it is likely to be very high when there is a separation of ownership when compared to below-listed cases.

• It arises when a corporation hires a private agency to conduct audits of its business practices.
• It arises when a government agency is assigned with the task to identify corrupt practices but a corporation.
• It arises as a consequence of the managers of the corporation focusing on enhancing shareholder value.