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The Corporations Act 2001 imposes a range of requirements on private and public companies incorporated in Australia. What requirements does the Act impose concerning the length of tenure for directors of Australian companies?

a.

No requirements, but it recommends that directors consider resigning after an extended period so as to encourage new ideas and fresh approaches to organisational management

b.

Maximum tenure of 60 consecutive years

c.

No requirements

d.

Maximum tenure of 6 consecutive years

e.

Maximum tenure of 10 consecutive years

f.

No requirements in terms of specific numbers, but there is a requirement that the constitution of publicly listed companies specifies the maximum tenure period

Question 11

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Which one of the following statements is false?

a.

A requirement for audit committees to be present in the top 500 listed companies on the ASX

b.

Enlargement of the responsibilities of the Financial Reporting Council (FRC)

c.

A requirement for auditors to make an annual declaration of independence

d.

An increase in the potential liability exposure for auditors

e.

Establishment of a panel that acts as arbitrator between a company and ASIC for contentious issues such as the application of accounting rules

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Tyron is an Australian citizen who lived and worked overseas in Amsterdam (the Netherlands). While he was living overseas, he was arrested and sentenced for trafficking a commercial quantity of illegal drugs. He spent 13 months in jail before being released early due to good behaviour. After his release from prison in Amsterdam, he was deported back to Australia. After his arrival back home, he has decided he would like to start a new chapter in his life by opening his own company specialising in information technology support. He has no prior experience in business, and does not have any higher education qualifications.

Which of the following statements regarding Tyrons ambitious back in Australia is most accurate?

a.

Australian laws can stop someone from being a company director due to crimes committed overseas, however they only apply to serious crimes such as murder

b.

He would be unable to be a company director indefinitely due to his past indiscretions

c.

His lack of business experience and professional qualifications means he would be unable to be a director under Australian law

d.

As his crimes relate to an overseas jurisdiction, they have no relevance to his circumstances in Australia

e.

He would be unable to be a company director in the immediate future due to his past indiscretions

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Which of the following bodies or reports offers a definition of corporate governance that is commonly considered the narrowest in terms of scope and responsibility?

a.

The National Association of Corporate Directors (NACD)

b.

The Organisation for Economic Co-operation and Development (OECD)

c.

The ASX Corporate Governance Council

d.

None (i.e., the definitions offered by the bodies or reports identified in this question are commonly considered to be largely identical in nature)

e.

The Cadbury Report

Question 14

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Which of the following theoretical perspectives would suggest that a board of directors may be unnecessary in modern corporations?

a.

Stakeholder theory

b.

Agency theory

c.

Stewardship theory

d.

Resource dependency theory

e.

None of theories listed in this question suggest that a board of directors may be unnecessary

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An audit committee can potentially be tasked with a range of roles. Which of the following tasks would not ordinarily be within the scope of an audit committee?

a.

Review issues surrounding the appropriate application of standards issued by the Australian Accounting Standards Board

b.

Monitor organisation policies that seek to forbid unethical activities

c.

Identify a suitable firm for purposes of carrying out an external audit

d.

Implement the external audit plan to ensure consistent application throughout the organisation

e.

Evaluate whether the provision of any non-audit services may have hindered the independence of the external auditor