Financial Reporting and Ethics - The Institute of Chartered ...

FINANCIAL REPORTING AND ETHICSCompany Country/Location Causes of Corporate GovernanceFailurailureses(b) Inability to expand or diversify.(c) Weak internal controls.8. Cadbury Schweppes India (a) Single promoter run firm.Confectionary(b) Company managed as personalproperty.(c) Taking financial risks on forexderivatives contracts (or swaps) whichended in big losses.(d) Audit committee never disclosedlossesin the governance reports.The struggle for good corporate governance appears to be life-long anddemanding of rigorous and steady campaign. The problem, however, is not inthe failure to have it as in giving up the chase.11.15 SUMMARY AND CONCLUSIONSThis chapter discusses, among others, the concept of corporate governance, itsnature, scope and significance. It identifies the agency problems in corporategovernance and how to minimize the threats of agency costs. The chapter alsoexamines the scope, background and concept of corporate social responsibilitiesand the limits to which organisations can go. Lastly, it highlights and discussesthe cases and causes of corporate governance failures.Refer to Comprehensive Questions and Suggested Solutions in Appendix II,page 269.11.16 REVISION QUESTIONS11.16.1 MULTIPLE-TIPLE-CHOICE QUESTIONS1. To whom, out of the following, does a corporation owe moral obligations?(i) Employees(ii) Customers(iii) Communities.A. (i) and (ii)B. (i) and (iii)C. (ii) and (iii)D. (iii) and onlyE. (i), (ii) and (iii)2. All the following are agents, EXCEPTA. Company SecretaryB. Divorced wifeC. Financial ControllerD. Co-partner in a BusinessE. Consignee.242