Which of the Following Is True of the "Comply or Else

question 98

Multiple Choice

Which of the following is true of the "comply or else" approach to corporate governance?

• A)It set stiff financial penalties for companies that refused to abide by the operational standards.
• B)It gave companies the flexibility to comply with the standards or explain why they didn't in their corporate documents.
• C)Its definition of what would be an acceptable explanation for not complying was not clear.
• D)It was not incorporated into the Sarbanes-Oxley Act of 2002-which governs ethical behavior in corporations.

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Definitions:

Variable Input

An input in the production process that can be varied in the short term to adjust output, such as labor or raw materials.

Profit-maximizing

The process or strategy by which a firm determines the price and output level that returns the greatest profit.

Output

The total amount of goods or services produced by a firm, industry, or economy in a given period.

Marginal Wage Cost

The additional cost incurred by hiring an extra unit of labor, essentially the change in total wage cost from hiring one more employee.