Jed Wimsey, in Auditing the Books of Various Businesses Around

question 126

Multiple Choice

Jed Wimsey, in auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought improper. Which of the following practices he found would be a breach of fiduciary duty?

• A) A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home.
• B) A director of a corporation profited $25,000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote.
• C) The directors or a corporation failed to declare a dividend for the fourth year in a row.
• D) An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors.
• E) A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations.

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Definitions:

Uterine Tubes

The uterine tubes, also known as fallopian tubes, are the ducts through which eggs travel from the ovaries to the uterus.

Infundibulum

A funnel-shaped structure, such as the stalk connecting the pituitary gland to the hypothalamus, or the distal end of the fallopian tubes.

Ampulla

An enlargement of a duct or canal that can store or slow the flow of fluids, found in various anatomical locations.

Oviducts

Tubes through which an ovum or egg passes from an ovary. Also known as Fallopian tubes in humans, they are involved in the transport of eggs and are the site of fertilization.