The Purpose of Governance Mechanisms in Corporations Is To

question 44

Multiple Choice

The purpose of governance mechanisms in corporations is to:

• A) centralize company resources to the top management.
• B) reduce the scope and frequency of the agency problems.
• C) satisfy the requirements of the Securities and Exchange Commission (SEC).
• D) limit corporate growth to manageable rates.
• E) monitor the performance of the Board of Directors.

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Definitions:

Accounting

The information system that identifies, records, and communicates the economic events of an organization to interested users.

Revenue Account

An account that tracks the income generated from normal business operations, such as sales of goods or services.

Credited

A bookkeeping record that augments liabilities or equity, or diminishes an asset or expense.