Economics.
A firm conducts a study to determine if absenteeism of day worker is different from those employees who work the night shift. A comparison is made of 150 workers for each shift. The results show that 37 day workers have been absent at least five times over the past year, while 52 night workers have missed at least five times. What does this reveal about the tendency for absenteeism among the worker? Calculate a 90% C.I for the difference in the proportion of workers on the two shifts who missed at least five times.Exesses is a family-owned company that is in the process of recovering from a major corporate scandal. Exesses is a substantial business that is not quoted. None of its shareholders owns more than 5% of the equity shares. None of the shareholders is able to take an active role in the company's management. Exesses' directors were all forced to step down because of the discovery that the directors had been overstating reported profits, which had the effect of inflating their profit-related bonuses. The directors also provided themselves with lavish lifestyles at the company's expense. For example, the company provided chauffeur-driven limousines to transport the directors on both business and personal travel. The entire board of Exesses has resigned. The shareholders have met and have appointed a new chairman and a chief executive. Neither of these appointees have had anything to do with Exesses in the past. They have both agreed that their first priority is to appoint a new board and to structure the management arrangements so that the shareholders' confidence is restored. The chairman has suggested that the new board should be structured as follows: . The chairman will work on a part-time basis and will be responsible for the management of the board, including chairing board meetings. The chairman will be paid a fixed annual salary that offers an appropriate rate for the time that he is expected to commit to the company. The chief executive will be employed on a full-time basis to manage the company itself and will receive both a substantial salary and a profit-related bonus. . Four additional full-time directors will be appointed to take charge of particular areas such as marketing and finance. Each will receive a similar package to the chief executive. . Two part-time directors will be appointed to participate in board meetings and to review corporate strategy. They will be paid a fixed salary. . The chief executive and each of the full-time directors will receive a 5% shareholding after satisfactorily completing three years on Exesses' board. The chairman and the two part-time directors will appoint a new external audit firm. They will negotiate a contract with a much larger firm than the outgoing auditor and will pay a larger fee for the new auditor's services. (i) Discuss the suitability of the proposals for the appointment and remuneration of the new board of directors from the perspective of maintaining shareholder confidence. [12] (ii) Discuss the implications of appointing a larger and more expensive external audit firm to replace the present auditor. [8] [Total 20]
