Corporate Governance

Which of the following is not one the underlying principles of the corporate governance Combined Code of Practice?

• integrity

• acceptability

• accountability

• openness

External audit of the accounts of a limited company is required

• at the discretion of the shareholders

• because it is demanded by the company’s bankers

• by the Companies Act 2016

• to detect fraud

Directors’ responsibilities are unlikely to include

• a duty of care

• a duty to keep proper accounting records

• a fiduciary duty

• a duty to propose high dividends for shareholders

A company may become insolvent if it

• makes a loss

• has negative working capital

• cannot pay creditors in full after realisation of its assets

• cannot meet its budgeted level of profit

A director of a limited company may not be liable for wrongful trading if he or she

• introduced into the balance sheet an asset based on a valuation of its brands sufficient to meet any shortfall

• brought in some expected sales from next year into the current year.

• increased the valuation of its inventories to cover any potential shortfall

• took every step to minimise the potential loss to creditors

Disqualification of directors may result from breaches under the

• Companies Act 2016 and Insolvency Act 1986

• Financial Services Act 1986

• Sales of Goods Act 1979

• Health and Safety at Work Act 1974

Which of the following actions will not help directors to protect themselves from non-compliance with their obligations and responsibilities ?

• Seeking professional help

• Keeping themselves fully informed about company affairs

• Ensuring that regular management accounts are prepared by the company.

• Including a disclaimer clause in their service contracts