In many jurisdictions, company law requires directors of companies to exercise independent judgement.If a qualified accountant accepts a directorship, this requirement reinforces which fundamental principle? IntegrityTechnical competence and due careObjectivityProfessional behaviour

Why independent directors are effective in looking after interest of shareholders? They are government nominated They do not have personal interest in the affairs of the company They are highly qualified They are independent of locality

Which of the following statements is INCORRECT regarding the ‘business judgment rule’? Select one: a. The business judgment rule will not apply if a director or an officer has not conducted proper inquiries and research in connection with a decision to act or not to act. b. The business judgment rule provides a safe harbour for directors and officers in certain situations which might otherwise constitute a failure to exercise due care and diligence. c. Whether a reasonable person would share the belief that a decision is in the best interests of the company is a relevant consideration for the purposes of the business judgment rule, rather than the directors’ or the officers’ subjective belief. d. The business judgment rule is a general defence for all directors’ and officers’ duties.

The companies legislation is based on the philosophy that men in responsible positions should be trusted until there is reason to distrust them. In light of this, directors are encouraged not to fetter their discretion and as much as possible not to exerctseQuestion 8Answera.the benefit of the members as wholeb.a collateral purposec.the purpose of enhancing firm valued.the interest of third parties

The independent auditor's primary responsibility is to A. the shareholders B. the directors C. the company's creditors (payables) D. the company's bank

The board of directors of a corporation:Multiple ChoiceIs elected by the corporate registrar.Are responsible for day-to-day operations of the business.Does not have the power to bind the corporation to contracts, due to lack of mutual agency.May not also be executive officers of the corporation, due to the separate entity principle.Is responsible for overseeing corporate activities.