An organization may improve the 'goodness' of the code of conduct primarily by: Having necessary rewards/penalties in place to ensure compliance with the code Having the code embraced by top management Keeping it comparable to the code of peer entities Ensuring a good fit of the code to the entity's mission, vision and values, whilst also regularly reviewing the code to adapt to changing circumstances. Keeping it unchanged every year The key challenge with non-financial performance measures is: The consistency of the measure across years The reliability/verifiability of the measure given its non-financial nature The relevance of the measure for decision making All factors (e.g. relevance, reliability, comparability) with measurement and comparability issues being the greatest The comparability of the measure across the companies in the same sector Question 4 (0.6 points) Saved Management may not cater to offer a good MD&A in the annual report if: The company is facing regulatory or public scrutiny about its accounting choices The company aims to attract new investors The commentary offers an opportunity to explain events from managers' standpoint There is no clear evidence that MD&A in annual reports matters (i.e. benefits outweigh the costs). The company is considering raising financing (either in the stock or the debt market) Question 5 (0.6 points) Saved The role of financial accounting has been evolving more towards: Understanding value Preserving value Reporting value Enabling and creating value Deterring value Question 7 (0.6 points) Saved Management commentaries do not provide useful information to investors when: They contain information on how short-term matters have affected financial performance as well as references to long term prospect, systemic risks and strategic challenges. They contain fragmented information that is hard to reconcile with financial statements They contain information about the entity's industry They provide material information for matters that are important to the entity's prospects They provide information about intangible resources and the way that the entity uses them to create value Question 8 (0.6 points) A key step to improving the content of MD&A is to: Use clear and precise language and properly integrate financial statements with commentary on business strategy and the business model. Comment on past events and performance Avoid commenting on how the company is facing recent economy trends Use language that reflects fully the complexity of the company's operations Identify and justify aggressive accounting choices