ACCA Applied Knowledge · Business and Technology · Political and legal factors affecting business
Which of the following BEST describes the purpose of a business's legal compliance function?
A compliance function ensures the organisation follows the laws and regulations that apply to it and manages the risk of breaching them. It does not exist to avoid tax or to set marketing strategy, which are separate matters.
- ATo ensure the organisation follows applicable laws and regulations and manages the risk of breaching themCorrect
- BTo maximise the organisation's profit by avoiding all tax liabilities
- CTo set the organisation's marketing strategy for each product
Explanation
Compliance exists to make sure the business follows the laws and regulations that apply to it and to manage the risk of breaches. Avoiding all tax is not lawful or its purpose, and marketing strategy belongs to the marketing function.
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