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

question 32

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 its operational standards.
• B) It gave companies the flexibility to comply with its standards or explain why they didn't in their corporate documents.
• C) It was extremely vague when it came to defining what would be an acceptable explanation for noncompliance.
• D) It was not incorporated into the Sarbanes-Oxley Act of 2002-which governs ethical behavior in corporations.

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Definitions:

Positive Externality

A beneficial effect experienced by a third party, resulting from an economic transaction that they are not directly involved in.

Beautiful Lawn

A well-maintained and visually appealing grass area around homes or in parks, often characterized by green, lush, and orderly appearance.

Pollution

The presence or introduction into the environment of substances or things that have harmful or poisonous effects.

Inventory Turnover Ratio

A measure of how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.