Acca paper F1 fia diploma in Accounting and Business Accountant in Business (AB/fab) exam kit

 (2 
marks)
143 
The agency problem refers to the fact that shareholders cannot legally be the directors of 
an organisation. 
Is this statement TRUE or FALSE? 
A True 
B False 
(1 mark) 
144 Which of the following would render a non-executive director of a company less suitable 
for this post? 
A 
The person worked for the company six years ago 
B 
The person has served as a non-executive for the last six years 
C 
The person has no previous contact with the executive directors 
D 
The person owns a number of the company’s shares
 (2 
marks)
145 An audit committee should: 
A 
consist of independent non-executive directors only 
B 
include at least one senior member of the internal audit team 
C 
include one member from the external audit firm 
D 
carry out a detailed review of critical elements of the balance sheet 
(2 marks)
146 The most obvious means of achieving public oversight of corporate governance is via: 
A 
the company establishing a comprehensive web site 
B 
publication of the Annual Report and Accounts 
C 
press announcements of all significant developments 
D 
shareholder access to the Annual General Meeting
 (2 
marks) 
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PRA CTICE OBJE CTIVE TEST QUESTIONS : 
SECTION 1 
K APLA N PUBLISH ING 
33 
147 Within the UK, what is the usual purpose of codes of practice on corporate governance? 
A 
To establish legally binding requirements to which all companies must adhere 
B 
To set down detailed rules to regulate the ways in which companies must operate 
C 
To provide guidance on the standards of best practice that companies should adopt 
D 
To provide a comprehensive framework for management and administration