Escolar Documentos
Profissional Documentos
Cultura Documentos
to accompany
Contemporary Issues in
Accounting
Prepared by
Matt Tilling
Correct answer: c
Learning Objective 13.1 ~ Outline what is understood by the term corporate failure
Correct answer: b
Learning Objective 13.1 ~ Outline what is understood by the term corporate failure
3. Though there are many potential causes of corporate failure what has been suggested
as the common underlying problem?
a. Changes in technology
b. Economic recession
*c. Management inadequacies
d. Changes in import protections
Correct answer: c
Learning Objective 13.2 ~ Examine the causes of corporate failure
4. Which of the following has been identified as a major cause of corporate failure?
a. Overexpansion
b. Dominant CEO
c. Failure of internal controls
*d. All of the above
Correct answer: d
Learning Objective 13.2 ~ Examine the causes of corporate failure
5. Poor figures in which financial statement is usually the trigger of corporate failure?
Correct answer: c
Learning Objective 13.3 ~ Identify the costs of corporate failure
Correct answer: c
Learning Objective 13.3 ~ Identify the costs of corporate failure
Correct answer: b
Learning Objective 13.4 ~ Evaluate the factors used to predict corporate failure
8. In the Altmans Z-score one financial accounting measure appears in 4 of the 5 ratios
used, what is it?
a. Sales Revenue
b. Operating Cash Flow
*c. Total Assets
d. Number of Independent Directors
Correct answer: c
Learning Objective 13.4 ~ Evaluate the factors used to predict corporate failure
9. One test of Altmans Z-score in Australia found that its success at predicting financial
distress was:
Correct answer: b
Learning Objective 13.4 ~ Evaluate the factors used to predict corporate failure
10. Research indicates that lenders making predictions of corporate failure relied:
Correct answer: c
Learning Objective 13.4 ~ Evaluate the factors used to predict corporate failure
11. Which of the following has ASIC identified as a practice that indicates risk of
corporate insolvency?
Correct answer: d
Learning Objective 13.5 ~ Assess the likely indicators of corporate failure
12. Which of the following has ASIC NOT identified as a practice that indicates risk of
corporate insolvency?
Correct answer: c
Learning Objective 13.5 ~ Assess the likely indicators of corporate failure
13. Corporate governance has been suggested to be at the heart of corporate failure. It has
been suggested that companies are less likely to get in financial trouble if their
boards:
Correct answer: b
Learning Objective 13.6 ~ Evaluate the relationship between corporate governance and
failure
14. Business Week considers which of the following to be good governance when rating
boards?
Correct answer: b
Learning Objective 13.6 ~ Evaluate the relationship between corporate governance and
failure
15. The corporate collapse in Australia that happened in the 1980s were thought to be a
result of:
Correct answer: b
Learning Objective 13.7 ~ Evaluate how regulation has been used to alleviate the effects of
corporate failure
Correct answer: c
Learning Objective 13.7 ~ Evaluate how regulation has been used to alleviate the effects of
corporate failure
17. A common factor identified as an issue in both the HIH and Enron collapses was:
Correct answer: a
Learning Objective 13.8 ~ Evaluate the anatomy of a corporate failure
18. It has been noted that remuneration packages for CEOs in failed companies:
Correct answer: b
Learning Objective 13.8 ~ Evaluate the anatomy of a corporate failure
19. A bubble in which class of assets has generally been claimed as the trigger for the
global financial crisis?
a. Shares
b. Precious metals
c. Consumables
*d. Housing
Correct answer: d
Learning Objective 13.9 ~ Critically evaluate the causes and consequences of the global
financial crisis (GFC) and evaluate how governments have intervened to alleviate the effects
of the GFC.
20. Which of the following mechanisms transferred the financial crisis from the US to the
rest of the world?
Correct answer: d
Learning Objective 13.9 ~ Critically evaluate the causes and consequences of the global
financial crisis (GFC) and evaluate how governments have intervened to alleviate the effects
of the GFC.