A Parent Might Attempt to Resolve a Transfer of Ownership

question 62

Multiple Choice

A parent might attempt to resolve a transfer of ownership by giving children active in the firm's management _____ stock and giving nonactive children _____ stock.

• A) preferred, common
• B) growth, speculative
• C) common, preferred
• D) more, less

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Definitions:

Sarbanes-Oxley Act

A U.S. federal law established in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Internal Control

A process designed to ensure the reliability of financial reporting, compliance with laws and regulations, and effectiveness and efficiency of operations.

Clan Control

A method of managing and influencing behavior within organizations through shared norms, values, and beliefs rather than through formal structures.

Bureaucratic Control

A system of management that relies on a fixed set of rules and procedures within an organization to regulate behavior and decisions.