If the Director of a Company Engaged the Services of an Organisation

question 13

Multiple Choice

If the director of a company engaged the services of an organisation of which he or she was a part-owner, and therefore stood to make financial gains from the arrangement, it would be:

• A) illegal.
• B) only permissible if agreed to by a majority vote of shareholders at the company's annual general meeting (AGM).
• C) a conflict of interest.
• D) a breach of the director's employment contract.
• E) all of the above.

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Definitions:

Consensus Estimate

The average estimate for a company's future earnings per share or other financial metrics, derived from the forecasts of analysts covering the stock.

Academic Studies

Systematic investigations into a particular subject, field, or issue, often conducted in educational settings to advance knowledge.

Layaway

A purchasing agreement in which a retailer allows a customer to pay for goods in installments while the retailer holds the item until it is paid in full.

Revenue Recognition

The accounting principle governing the specific conditions under which revenue is recognized or recorded.