ACCA Applied Knowledge · Business and Technology · Governance in business organisations
Dalmore plc voluntarily publishes an annual sustainability report. The board wants stakeholders to have confidence that the environmental data in it are reliable. Which action would MOST directly increase that confidence?
Independent external assurance of the data would most directly increase confidence. An outside party who is not involved in preparing the report provides objective evidence that the environmental information is accurate and fairly presented, which improves reliability for stakeholders.
- AHaving the report data independently assured by an external partyCorrect
- BPublishing the report on the company website rather than in print
- CReducing the number of environmental indicators reported to one
- DHaving the report approved by the sales director
Explanation
Independent external assurance gives stakeholders objective evidence that the data are accurate and fairly presented, which most directly raises credibility. The publication medium does not affect reliability. Reducing indicators to one reduces completeness, and approval by a sales director, who is not independent, adds little confidence.
Did you get it right without looking?
One question tells you little. A timed set on Governance in business organisations shows your real accuracy, how long you take and where you lose marks.
More Governance in business organisations questions
- Which of the following is a mechanism intended to reduce the agency problem by aligning directors' interests with those of shareholders?
- Which of the following best describes the key difference between a unitary board and a two-tier board?
- Which of the following best describes corporate social responsibility (CSR)?
- Which board committee is normally responsible for recommending the pay and incentive packages of executive directors, and is best composed o…
- Which of the following is a disadvantage of a principles-based approach to corporate governance?
- Zentra Co manufactures clothing. A director argues that the company's only social responsibility is to make profit for its shareholders with…