Carlton Finds That a Geographic Restructuring Would Have a Positive

question 70

Multiple Choice

Carlton finds that a geographic restructuring would have a positive effect on his insurance company and increase its efficiency.He draws up a report for the board of directors in which he mentions that separate departments should be set up for each of the company's 10 sales territories.Which of the following statements is most likely to increase the positivity of his proposition?

• A) Let me know if you want to work on changing the structure of the company.
• B) Using a geographic structure will not guarantee that the company's productivity increases.
• C) Geographic restructuring is not likely to reduce the company's overall costs.
• D) I look forward to putting together a detailed plan to restructure the company geographically.
• E) A geographic structure might possibly have a positive effect on the company.

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Definitions:

AASB 127

An accounting standard issued by the Australian Accounting Standards Board that outlines the accounting and reporting principles for investments in associates and joint ventures.

Separate Financial Statements

Financial statements presented by a parent or an investment entity that displays its investments in subsidiaries, associates, and joint ventures at cost or in accordance with specified financial instruments standards.

Reporting Entity

An entity, including companies and governments, that is required to present its financial statements to external users.

Percentage Of Ownership

Refers to the fraction of a company's shares that an individual or entity owns, typically expressed as a percentage of the total shares.