Which of the Following Statements Is FALSE

question 10

Multiple Choice

Which of the following statements is FALSE?

• A)The Cadbury Commission stiffened the criminal penalties for providing false information to shareholders.
• B)The Exchange Acts of 1933 and 1934,among other things,established the Securities and Exchange Commission (SEC)and prohibited trading on private information gained as an insider of a firm.
• C)Many of the problems at Enron,WorldCom,and elsewhere were kept hidden from boards and shareholders until it was too late.In the wake of these scandals,many people felt that the accounting statements of these companies,while often remaining true to the letter of GAAP,did not present an accurate picture of the financial health of a company.
• D)While one study found that those firms that separated the position of CEO and chairman performed better,another found no relation between the independence of key board committees and firm performance in the post-Cadbury era.

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Definitions:

Inflexibility

The lack of ability or willingness to change or adapt to new circumstances, often hindering progress or innovation.

Bureaucracy

A system of government or business administration characterized by many layers of management, strict policies and rules, and a highly structured organization.

Empower

To give authority or power to individuals or groups, enabling them to take control over their lives or circumstances.

Matrix Structures

Organizational design that combines functional and project-based departmentalization, facilitating resource sharing and functional expertise.