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CMA Final · Cost and Management Audit · Evaluation of Corporate Image

Which of the following is the best example of a factor that builds a favourable corporate image through the firm's social responsibility, as examined in a management audit?

Consistent environmental compliance and community development initiatives disclosed to stakeholders build a favourable image because they show social responsibility. Unjustified price increases, fewer audit committee meetings and delayed supplier payments tend to damage trust and reputation, so they do not support a good corporate image.

  1. AConsistent environmental compliance and community development initiatives disclosed to stakeholdersCorrect
  2. BRaising selling prices above competitors without any change in quality
  3. CReducing the number of audit committee meetings during the year
  4. DDelaying payment to suppliers to improve working capital

Explanation

Environmental compliance and community programmes visibly demonstrate responsibility and strengthen reputation. Unjustified price rises, fewer committee meetings and delayed supplier payments tend to weaken stakeholder trust and image.

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