ACCA AS Ethics and Corporate Governance

Question 1

According to the IESBA Code of Ethics, which of the following is NOT one of the five fundamental principles of professional ethics?

Accepted Answer

Profitability

Answer

Integrity

Answer

Objectivity

Answer

Professional behaviour

Question 2

The agency problem in corporate governance refers to which of the following situations?

Accepted Answer

Conflicts arising from the separation of ownership and control between shareholders and directors

Answer

Government interference in corporate decision-making

Answer

Disputes between shareholders and creditors over asset priority

Answer

Tax avoidance strategies employed by company directors

Question 3

Which UK corporate governance report first introduced the 'comply or explain' approach to governance codes?

Accepted Answer

The Cadbury Report (1992)

Answer

The Greenbury Report (1995)

Answer

The Hampel Report (1998)

Answer

The Higgs Report (2003)

Question 4

Which of the following best describes a unitary board structure?

Accepted Answer

A single board containing both executive and non-executive directors

Answer

A board divided into a supervisory board and a separate management board

Answer

A board composed entirely of independent non-executive directors

Answer

A board that operates without a formal chairperson

Question 5

Under the UK Corporate Governance Code, what is the recommended minimum proportion of independent non-executive directors on a FTSE 350 company board (excluding the chair)?

Accepted Answer

At least half of the board

Answer

One-third of the board

Answer

Two-thirds of the board

Answer

Three-quarters of the board

Question 6

Which ethical framework judges the morality of an action solely based on its outcomes or consequences?

Accepted Answer

Consequentialism

Answer

Deontological ethics

Answer

Virtue ethics

Answer

Rights-based ethics

Question 7

The concept of 'enlightened shareholder value' embedded in the UK Companies Act 2006 (s172) requires directors to:

Accepted Answer

Promote the long-term success of the company for shareholders while having regard to wider stakeholder interests

Answer

Maximise short-term shareholder returns above all other considerations

Answer

Allow shareholders to vote on all significant management decisions

Answer

Restrict dividend payments in order to preserve corporate capital