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CS Professional · Compliance Management, Audit and Due Diligence · Signing and Certification

Pinnacle Foods Ltd restated its financial statements because of fraud in revenue recognition. The managing director, who has since resigned, had received remuneration including stock options in the restated period. What does the Act require?

The company must recover from the managing director, though now a past one, the remuneration including stock options received in excess of what would have been payable under the restated financial statements. The provision covers past and present managing directors, whole-time directors, managers and CEOs.

  1. AThe company must recover the excess remuneration over what was payable on restated statements, even from a past managing directorCorrect
  2. BRecovery is possible only from the current managing director
  3. CThe company may recover only if the Tribunal orders it
  4. DNo recovery is possible once the director has resigned

Explanation

Section 199 requires recovery from any past or present managing director, whole-time director, manager or CEO of remuneration, including stock option, received in excess of what would have been payable on the restated statements. Resignation does not remove the liability.

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