December 2007 Q1 (a) Define transparency and evaluate its importance as an underlying principle in corporate governance and in relevant

and reliable financial reporting. Your answer should refer to the case as appropriate. (10 marks) (b) Explain Kohlbergs three levels of moral development and identify the levels of moral development demonstrated by the contributions of Gary Howells, Vanda Monroe and Martin Chan. (12 marks) (c) Critically discuss FOUR principal roles of non-executive directors and explain the potential tensions between these roles that WMs non-executive directors may experience in advising on the disclosure of the overestimation of the mallerite reserve. (12 marks) (d) Draft a letter for Tim Blake to send to WMs investors to include the following: (i) why you believe robust internal controls to be important; and (ii) proposals on how internal systems might be improved in the light of the overestimation of mallerite at WM. (16 marks, in this 4 professional) Q2 (a) Describe four strategies that can be used to manage risk and identify, with reasons, an appropriate strategy for each of the three risks mentioned in the case. 12 marks) (b) Explain the meaning of Stephanies comment: I would like to get risk awareness embedded in the culture at the Southland factory. (5 marks) (c) Explain the benefits of performance-related pay in rewarding directors and critically evaluate the implications of the package offered to Choo Wang. (8 marks) Q3 (a) Explain the roles of the chairman in corporate governance. (5 marks) (b) Assess the benefits of the separation of the roles of chief executive and chairman that Alliya Yongvanich argued for and explain her belief that accountability to shareholders is increased by the separation of these roles. (12 marks) (c) Critically evaluate Vincent Violas view that corporate governance provisions should vary by country. (8 marks) Q4 (a) Define stakeholder and explain the importance of identifying all the stakeholders in the stadium project. (10 marks) (b) Compare and contrast Gray, Owen and Adamss pristine capitalist position with the social contractarian position. Explain how these positions would affect responses to stakeholder concerns in the new stadium project. (8 marks) (c) Explain what fiduciary responsibility means and construct the case for broadening the football club boards fiduciary responsibility in this case. (7 marks)

June 2008 Q1 (a) Any large project such as the Giant Dam Project has a number of stakeholders. (i) Define the terms stakeholder and stakeholder claim, and identify from the case FOUR of R&Ms external stakeholders as it carries out the Giant Dam Project; (6 marks) (ii) Describe the claim of each of the four identified stakeholders. (4 marks) (b) Describe a framework to assess the risks to the progress of the Giant Dam Project. Your answer should include a diagram to represent the framework. (6 marks) (c) Using information from the case, assess THREE risks to the Giant Dam Project. (9 marks) (d) Prepare the statement for Mr Markovnik off to read out at the AGM. The statement you construct should contain the following. (i) A definition and brief explanation of sustainable development; (3 marks) (ii) An evaluation of the environmental and sustainability implications of the Giant Dam Project; (8 marks) (iii) A statement on the importance of confidentiality in the financing of the early stage working capital needs and an explanation of how this conflicts with the duty of transparency in matters of corporate governance. (6 marks) Professional marks for layout, logical flow and persuasiveness of the statement. (4 marks) (e) Internal controls are very important in a complex civil engineering project such as the Giant Dam Project. Describe the difficulties of maintaining sound internal controls in the Giant Dam Project created by working through sub-contractors. (4 marks) Q2 (a) Explain why auditor independence is necessary in auditor-client relationships and describe THREE threats to auditor independence in the case. (9 marks) (b) Anne is experiencing some tension due to the conflict between her duties and responsibilities as an employee of Fillmore Pierce and as a qualified professional accountant. (i) Compare and contrast her duties and responsibilities in the two roles of employee and professional accountant. (6 marks) (ii) Explain the ethical tensions between these roles that Anne is now experiencing. (4 marks) (c) Explain how absolutist (dogmatic) and relativist (pragmatic) ethical assumptions would affect the outcome of Annes decision. (6 marks)

Q3 (a) Explain agency in the context of corporate governance and criticise the governance arrangements of Rosh and Company. (12 marks) (b) Explain the roles of a nominations committee and assess the potential usefulness of a nominations committee to the board of Rosh and Company. (8 marks) (c) Define retirement by rotation and explain its importance in the context of Rosh and Company. (5 marks) Q4 (a) There are arguments for both rules and principles-based approaches to corporate governance. (i) Describe the essential features of a rules-based approach to corporate governance; (3 marks) (ii) Construct the argument against Professor Wests opinion, and in favour of Professor Lerois opinion that a principles-based approach would be preferable in developing countries. Your answer should consider the particular situations of developing countries. (10 marks) (b) The Sarbanes-Oxley Act contains provisions for the attestation (verification) and reporting to shareholders of internal controls over financial reporting. Describe the typical contents of an external report on internal controls. (8 marks) (c) Construct the arguments in favour of Professor Lerois remark that external reporting requirements on internal controls were too ambitious for small and medium companies. (4 marks)

December 2008 Q1 (a) Assess the secrecy option using Tuckers model for decision-making. (10 marks) (b) Distinguish between strategic and operational risks, and explain why the secrecy option would be a source of strategic risk. (10 marks) (c) Mr Cobar, the chief executive of SHC, has decided to draft two alternative statements to explain both possibile outcomes of the secrecy/licensing decision to shareholders. Once the board has decided which one to pursue, the relevant draft will be included in a voluntary section of the next corporate annual report. (i) Draft a statement in the event that the board chooses the secrecy option. It should make a convincing business case and put forward ethical arguments for the secrecy option. The ethical arguments should be made from the stockholder (or pristine capitalist) perspective. (8 marks) (ii) Draft a statement in the event that the board chooses the licensing option. It should make a convincing business case and put forward ethical arguments for the licensing option. The ethical arguments should be made from the wider stakeholder perspective. (8 marks) (iii) Professional marks for the persuasiveness and logical flow of arguments: two marks per statement. (4 marks) (d) Corporate annual reports contain both mandatory and voluntary disclosures. (i) Distinguish, using examples, between mandatory and voluntary disclosures in the annual reports of public listed companies. (6 marks) (ii) Explain why the disclosure of voluntary information in annual reports can enhance the companys accountability to equity investors. (4 marks) Q2 (a) Describe the typical roles of a risk management committee. (6 marks) (b) Using the TARA framework, construct four possible strategies for managing the risk presented by Product 2. Your answer should describe each strategy and explain how each might be applied in the case. (10 marks) (c) Risk committee members can be either executive or non-executive. (i) Distinguish between executive and non-executive directors. (2 marks) (ii) Evaluate the relative advantages and disadvantages of Chens risk management committee being non-executive rather than executive in nature. (7 marks)

Q3 (a) Internal control and audit are considered to be important parts of sound corporate governance. (i) Describe FIVE general objectives of internal control. (5 marks) (ii) Explain the organisational factors that determine the need for internal audit in public listed companies. (5 marks) (b) Criticise the internal control and internal audit arrangements at Gluck and Goodman as described in the case scenario. (10 marks) (c) Define market risk for Mr Allejandra and explain why Gluck and Goodmans market risk exposure is increased by failing to have an effective audit committee. (5 marks) Q4 (a) Describe the purposes and typical contents of a corporate code of ethics. (9 marks) (b) Strategic positioning is about the way that a company as a whole is placed in its environment and concerns its fit with the factors in its environment. With reference to the case as appropriate, explain how a code of ethics can be used as part of a companys overall strategic positioning. (7 marks) (c) Assess Mr Hoggs belief that employing child labour is always ethically wrong from deontological and teleological (consequentialist) ethical perspectives. (9 marks)

June 2009 Q1 (a) Kohlbergs theory of the development of moral reasoning contains three levels, with each level containing two stages or planes. It is a useful framework for understanding the ways in which people think about ethical issues. (i) Explain the three levels of Kohlbergs theory. (6 marks) (ii) Identify the level that Mr Mineta operated at and justify your choice using evidence from the case. (4 marks) (iii) Identify, with reasons, the stage (or plane) of Kohlbergs moral development most appropriate for a professional bank employee such as Mr Mineta as he undertakes his trading duties. (2 marks) (b) Explain FIVE typical causes of internal control failure and assess the internal control performance of Global-bank in the case scenario. (10 marks) (c) Analyse the agency relationship that exists between the board of Global-bank and the trustees of the Shalala Pension Fund. (4 marks) (d) Distinguish between narrow and wide stakeholders and identify three narrow stakeholders in Global-bank (based on Evan & Freemans definition) from information in the case. Assess the potential impact of the events described on each narrow stakeholder identified. (10 marks) (e) You have been asked to draft a letter from Millau Haber, chairman of the Shalala trustees, to Mrs Keefer as a result of concerns over the events described in the case. The letter should explain the roles and responsibilities of the chief executive in internal control, and criticise Mrs Keefers performance in that role. (10 marks) Professional marks are available in part (e) for the structure, content, style and layout of the letter. (4 marks) Q2 (a) Explain, using accounting as an example, what the public interest means as used by Mrs Yttria in her speech. (5 marks) (b) This requirement concerns ethical threats. It is very important for professional accountants to be aware of ethical threats and to avoid these where possible. (i) With reference to the case as appropriate, describe five types of ethical threat. marks) (ii) Assess the ethical threats implied by Mr Mordues beliefs. (5

(8 marks)

(c) Assess Ivor Nahums remarks about the accounting profession in the light of Gray, Owen & Adams deep green (or deep ecologist) position on social responsibility. (7 marks)

Q3 (a) Miss Hoiku stated that it was difficult to remove a serving chief executive from office. (i) Explain the ways in which a company director can leave the service of a board. marks) (4

(ii) Discuss Miss Hoikus statement that it is difficult to remove a serving chief executive from a board. (4 marks) (b) Assess, in the context of the case, the importance of the chairmans statement to shareholders in TQ Companys annual report. (5 marks) (c) Criticise the structure of the reward package that Mr Smith awarded himself. (d) Criticise Miss Hoikus performance as chairman of TQ Company. Q4 (a) The risk manager has an important role to play in an organisations risk management. (i) Describe the roles of a risk manager. (ii) Assess John Pentanols understanding of his role. (4 marks) (4 marks) (4 marks) (8 marks)

(b) With reference to a risk assessment framework as appropriate, criticise Johns advice that H&Z should withdraw from the activity that incurs Risk 3. (6 marks) (c) Jane Xylene expressed a particular view about the value of risk management in H&Z Company. She also said that she wanted to see entrepreneurial risk takers. (i) Define entrepreneurial risk and explain why it is important to accept entrepreneurial risk in business organisations; (4 marks) (ii) Critically evaluate Jane Xylenes view of risk management. (7 marks)

December 2009 Q1 (a) The independent consultants advice was that the Mary Jane should have received structural work to make her safe for operating in the rougher seas of the Northport route. Sea Ships Company did not act on the advice. Using the seven-step American Accounting Association (AAA) model for ethical decision-making, examine the companys dilemma on whether or not to disclose this information publicly. (14 marks) (b) Using information from the case, identify and analyse the internal control failures at Sea Ships Company and on the Mary Jane. (12 marks) (c) Assess the contribution that non-executive directors might have made in improving the corporate governance at Sea Ships Company. (8 marks) (d) Draft a memo from chief executive Wim Bock to the senior officers on the other ships in the Sea Ships fleet informing them of vital internal control and risk issues following the loss of the Mary Jane. The memo should include the following, all placed in the context of the case. (i) An assessment, based on information in the case, of the importance for the board of Sea Ships to have all the information relating to key operational internal controls and risks; (6 marks) (ii) An explanation of the qualitative characteristics of information needed by the Sea Ships board for the assessment of internal controls and risks. (6 marks) Professional marks will additionally be awarded in part (d) for drafting a memo that is clear, has a logical flow, is persuasive and is appropriately structured. (4 marks) Q2 (a) Explain the content of a directors induction programme and assess the advantages of such a programme for Sam. (8 marks) (b) Using information from the case, critically evaluate Annettes belief that two-tier boards are preferable in complex and turbulent environments such as at Ding Company. (8 marks) (c) Assess Arif Zamans understanding of his role as non-executive chairman. Q3 (a) Explain the meaning of integrity and its importance in professional relationships such as those described in the case. (5 marks) (b) Criticise Potto Sinters ethical and professional behaviour in the case. (10 marks) (c) Critically evaluate the alternatives that John Wang has in his ethical dilemma. (10 marks) (9 marks)

Q4 (a) Describe what embedding risk means with reference to Saltoc Company. (6 marks) (b) Assess the ability of Saltocs management culture to implement embedded risk systems. (8 marks) (c) Explain what external risk auditing contains and construct the case for an external risk audit at Saltoc Company. (11 marks)

June 2010 Q1 (a) Distinguish between voluntary and involuntary stakeholders, identifying both types of stakeholders in Hesket Nuclear. Assess the claims of THREE of the involuntary affected stakeholders identified. (12 marks) (b) The trade union, Forward Together, has had a long relationship with HN and represents not only the main workforce but also the employees of the maintenance company replaced by the foreign workers. Explain the roles of employee representatives such as trade unions in corporate governance and critically evaluate, from the perspective of HPCs board, the contribution of Forward Together in the governance of HPC. (10 marks) (c) Explain what an agency relationship is and examine the board of HPCs current agency relationship and objectives. Briefly explain how these would differ if HPC was a company with private shareholders. (10 marks) (d) As a part of HPCs public relations effort, it has been proposed that a response statement should be prepared for the companys website to help address two major challenges to their reputation. Draft this statement to include the following: (i) Referring to the NNN report, explain why accurate risk assessment is necessary at Hesket Nuclear. (8 marks) (ii) Explain what a social and environmental footprint is and construct the argument that HNs overall social and environmental footprint is positive. (6 marks) Professional marks will additionally be awarded in part (d) for drafting a statement that is clear, has a logical flow, is persuasive and is appropriately structured. (4 marks) Q2 (a) Criticise the performance of Tomato Banks remuneration committee in agreeing Mr Woofs reward package. (10 marks) (b) Describe the components of an appropriately designed executive reward package and explain why a more balanced package of benefits should have been used to reward Mr Woof. (10 marks) (c) Construct an ethical case for Mr Woof to voluntarily accept a reduction in his pension value in recognition of his failure as chief executive of Tomato Bank. (5 marks) 9

Q3 (a) Distinguish between rules-based and principles-based approaches to internal control system compliance as described by Claire Mahmood and discuss the benefits to an organisation of a principles-based approach. (7 marks) (b) Mr Rogalski is sceptical over the value of internal control and believes that controls must be industry-specific to be effective. Describe the advantages of internal control that apply regardless of industry sector and briefly explain the meaning of the statement, unmonitored controls tend to deteriorate over time. Your answer should refer to the case scenario as appropriate. (10 marks) (c) The COSO report explains that assessment of internal controls [can] ... involve a significant amount of ... internal audit testing. Define internal audit testing and explain the roles of internal audit in helping ensure the effectiveness of internal control systems. (8 marks) Q4 (a) Explain how a family (or insider-dominated) business differs from a public listed company and, using evidence from the case, explore the governance issues of a family or insider-dominated business. (10 marks) (b) Mr Shreeves is a professional accountant and auditor. Explain why he is considered a professional by society and describe the fundamental principles (or responsibilities) of professionalism that society expects from him and all other accountants. (7 marks) (c) Discuss the professional and ethical dilemma facing Mr Shreeves in deciding whether or not to tell Ken and Steffi about Ivans activity. Advise Mr Shreeves of the most appropriate course of action. (8 marks)

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December 2010 Q1 (a) (i) Explain the factors that might lead institutional investors to attempt to intervene directly in the management of a company; (6 marks) (ii) Construct the case for institutional investors attempting to intervene in ZPT after the first results restatement was announced. (6 marks) (b) Distinguish between absolutist and relativist approaches to ethics and critically evaluate the behaviour of Shazia Lo (the accountant who accepted a bonus for her silence) using both of these ethical perspectives. (10 marks) (c) Draft sections of the speech to cover the following areas: (i) Explain the importance of sound corporate governance by assessing the consequences of the corporate governance failures at ZPT; (10 marks) (ii) Construct the case for the mandatory external reporting of internal financial controls and risks; (8 marks) (iii) Explain the broad areas that the proposed external report on internal controls should include, drawing on the case content as appropriate. (6 marks) Professional marks will additionally be awarded in part (c) for the structure, flow, persuasiveness and tone of the answer. (4 marks) Q2 (a) Explain sustainability in the context of environmental auditing and criticise the finance directors understanding of sustainability. (6 marks) (b) Explain the three stages in an environmental audit and explore, using information from the case, the issues that JGP will have in developing these stages. (9 marks) (c) Define environmental risk. Distinguish between strategic and operational risks and explain why the environmental risks at JGP are strategic. (10 marks) Q3 (a) Explain the term conflict of interest in the context of non-executive directors and discuss the potential conflicts of interest relating to KK and Soria Supplies if John Soria were to become a non-executive director of KK Limited. (8 marks) (b) Assess the advantages of appointing experienced and effective non-executive directors to the KK board during the period in which the company was growing rapidly. (7 marks) (c) Explain the typical contents of a best practice corporate governance report within an annual report and how its contents could help meet the information needs of Fin Brun. (10 marks)

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Q4 (a) Define liquidity risk and explain why it might be a significant risk to UU Limited. (5 marks) (b) Define risk embeddedness and explain the methods by which risk awareness and management can be embedded in organisations. (7 marks) (c) Examine the obstacles to embedding liquidity risk management at UU Limited. (8 marks) (d) Criticise the voluntary supplier payment policy as a means of demonstrating UUs social responsibility. (5 marks)

June 2011 Q1 (a) Explore the circumstances leading to the fuel tank problem. Identify and explain internal control measures capable of mitigating the risk in future car development projects. Note: Ignore any possible legal or regulatory issues that may arise. (12 marks) (b) Explain Kohlbergs three levels of moral development and identify, with reasons, the levels of development exhibited by James Tsakos, Kathy Yao and Vernon Vim. (12 marks) (c) Distinguish between annual general meetings (AGMs) and extraordinary general meetings (EGMs). Explain the purpose of each and the advantages of holding an EGM to discuss the issues raised by the whistleblower. (8 marks) (d) Prepare a statement for Mr Tsakos, the chief executive, to read at the EGM to address the following areas. (i) An explanation of the roles of the chief executive in managing the issues described in the case at Bobo Company; (8 marks) (ii) A defence of the companys decisions on the Bobo Foo from a pristine capitalist ethical perspective (using Gray, Owen & Adamss framework). (6 marks) Professional marks will additionally be awarded in part (d) for drafting a statement that is clear, has a logical flow, is persuasive and is appropriately structured. (4 marks)

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Q2 (a) Criticise Raz Duttas beliefs about the need for risk assessment. Explain why risks are dynamic and therefore need to be assessed regularly. (8 marks) (b) Using the TARA framework, select and explain the appropriate strategy for managing each risk (A, B, C and D). Justify your selection in each case. (6 marks) (c) Explain what related risks are and describe how Risks E and F might be positively correlated. (5 marks) (d) The risk consultants reported that YGT needed to cultivate a culture of risk awareness and that this should permeate all levels of the company. Required: Explain and assess this advice. Q3 (a) Discuss the ways in which charities differ from public listed companies and explain how these differences affect their respective governance structures. (9 marks) (b) Define transparency and construct the case for greater transparency in the governance of the Horace Hoi Organisation. (8 marks) (c) Explain how an audit committee might assist in addressing the apparent internal control deficiencies at HHO. (8 marks) Q4 (a) Briefly describe the five types of ethical threats in the IFAC code of professional ethics (2009) and discuss how accepting excessive gifts or hospitality can give rise to some of these threats within this case. (9 marks) (b) Criticise Ann Koos beliefs and behaviour, and explain why accepting the $50,000 conflicts with her duty to uphold the public interest. (10 marks) (c) Explain what insider dealing/trading is and why it is an unethical and often illegal practice. (6 marks) (6 marks)

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December 2011 Q1 (a) Describe the general purposes of a corporate code of ethics and evaluate Coastal Oils performance against its own stated ethical aims as set out in its code of ethics. (10 marks) (b) Explain, using examples, the difference between voluntary and mandatory disclosure, and assess Tanya Tuns proposition that additional voluntary disclosure on environmental risk management would be material to the shareholders. (10 marks) (c) Prepare a statement for Mrs Ahmed to present before the committee that explains the following: (i) The internal control failures that gave rise to the accident; (10 marks) (ii) The difference between subjective and objective risk assessment (using examples). Argue against Senator Joness view that Mrs Ahmed should have known this was going to happen; (8 marks) (iii) Health and safety risk and the factors that can increase this risk in an organisation; (4 marks) (iv) Why Coastal Oil cannot guarantee the prevention of further health and safety failures, using the ALARP (as low as reasonably practicable) principle; (4 marks) Professional marks will be awarded in part (c) for logical flow, persuasiveness, format and tone of the answers. (4 marks) Q2 (a) Briefly distinguish between rules and principles-based approaches to corporate governance. Critically evaluate the Geeland stock exchanges guidance that all stakeholders should then apply these flexibly to the varying circumstances of individual companies. (12 marks) (b) Explain why a separation of the roles of chairman and chief executive is considered best practice in most jurisdictions. (8 marks) (c) Assess the comply or explain statement made by Anson Company in its 2011 annual report. (5 marks) Q3 (a) Explain the purposes of a chief executives reward package and review the factors that might influence the level of reward for Mrs Evans after the privatisation. (10 marks) (b) Define market risk and justify, giving reasons, Tom Nwedes belief that retaining Mrs Evans was crucial in mitigating market risk. (10 marks) (c) Define, and explain the advantages of, proxy voting in the context of the case. (5 marks)

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Q4 (a) Explain the meaning of rights and responsibilities in the context of Biggo and describe how these terms are interpreted at the two ends of the Gray, Owen & Adams continuum. (10 marks) (b) Justify, using evidence from the case, which of Gray, Owen & Adamss positions are best described by the comments made by Robert Tens and also Margaret Heggs. (6 marks) (c) Define social responsibility as used by Albert Doo. Contrast how short and long-term shareholder interest perspectives may affect Biggos attitude to the requested contribution for the childrens play area. (9 marks)

June 2012 Q1 (a) Explain risk appetite and demonstrate how different risk appetites might affect the selection of investments between Jayland and Pealand. (6 marks) (b) Use the AAA (American Accounting Association) seven-step model to examine the ethical decision whether to select the Jayland option or the Pealand option. (14 marks) (c) Describe the general purposes of an internal control system and, based on Emily Baas views, assess the main internal control challenges that Hayho might encounter if it chose the Jayland option. (12 marks) (d) Prepare briefing notes from Emily Baa to prepare chief executive of Hayho, Helen Duomo, for the board meeting as requested in the case. The notes should cover the following: (i) A discussion of the meaning of accountability at Hayho and of how the Mendelow framework can be used to predict the influence of the Watching Business pressure group; (7 marks) (ii) A brief explanation of the agency relationship between the board of Hayho and Quark Investments, and advice on why the demands from Watching Business should be carefully considered. (7 marks) Professional marks will be awarded in part (d) for the clarity, flow, persuasiveness and structure of the briefing notes. (4 marks)

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Q2 (a) Define independence in the context of corporate governance and critically evaluate Mr Louses comment that greater independence of non-executive directors is important in increasing the effectiveness of board committees. (8 marks) (b) Describe the roles of a risk committee and criticise Mr Louses understanding of the risk committee in Zogs Company. (9 marks) (c) Assess whether risk committees and risk mitigation systems are more important in larger companies, like Zogs, than in smaller companies like SmallCo. (8 marks) Q3 (a) Define conflict of interest and assess the consequences of Jack Hus behaviour after Polly Shahs appraisal. (10 marks) (b) Describe four ethical safeguards that could be used in Jojo to prevent a recurrence of the events like those described in the case. (8 marks) (c) Explain the typical criteria used in the performance measurement of individual directors and discuss the reasons why individual performance measurement of partners may be difficult to implement at Jojo. (7 marks) Q4 (a) Compare the typical governance arrangements between a family business and a listed company, and assess Crispins view that the Lum family will lose the freedom to manage the company as they wish after the flotation. (10 marks) (b) Assess the benefits of introducing an induction programme for the new NEDs, and requiring continual professional development (CPD) for the existing executives at Lum Co after its flotation. (8 marks) (c) Distinguish between unitary and two-tier boards, and discuss the difficulties that the Lum family might encounter when introducing a unitary board. (7 marks)

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December 2012 Q1 (a) Define social footprint and describe, from the case, four potential social implications of Professor Krolls discovery about the health risks of X32. (10 marks) (b) Describe what risk diversification means and explain why diversifying the risk related to the potential claims against the use of X32 would be very difficult for P&J. (10 marks) (c) Criticise the professional and ethical behaviour of Hannah Yin, clearly identifying the fundamental principles of professionalism she has failed to meet. (9 marks) (d) Writing as the journalist who discovered the story, draft a short article for the magazine Investors in Companies. You may assume the magazine has an educated readership. Your article should achieve the following: (i) Distinguish between strategic and operational risk and explain why Professor Krolls findings are a strategic risk to P&J; (8 marks) (ii) Discuss the boards responsibilities for internal control in P&J and criticise Mr Hos decision to choose Plan B. (9 marks) Professional marks: structure, logical flow, persuasiveness, tone of the article Q2 (a) Examine how sound corporate governance can make it more difficult for companies to fail, clearly explaining what corporate governance means in your answer. (10 marks) (b) Explain the difference between rules-based and principles-based approaches to corporate governance regulation, and argue against Martin Mungs belief that comply or explain is ineffective. (8 marks) (c) Explain what accountability means, and discuss how the proposed new provisions for shorter re-election periods and biographical details might result in greater accountability as the code suggests. (7 marks) Q3 (a) Explain typical reasons why an internal control system might be ineffective. (5 marks) (b) Explain the internal control deficiencies that led to the increased product failures at Yaya. (10 marks) (c) Discuss the general qualities of useful information, stating clearly how they would be of benefit to Mr Janoon, and recommend specific measures which would improve information flow from the QC lab to Mr Janoon. (10 marks) Q4 (a) Use Tuckers five question model to assess the decision to choose Route A. (10 marks) (b) Discuss the importance to RDC of recognising all of the stakeholders in a decision such as deciding between Route A and Route B. (8 marks) (c) Explain what a stakeholder claim is, and critically assess the stakeholder claims of Mr Krul, the local government authority and the colony of endangered birds. (7 marks) (4 marks)

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June 2013 Q1 (a) Briefly explain related and correlated risks. Explore the correlation between legal risk and reputation risk for Hoppo if it were to cancel its contract with Red Co. (10 marks) (b) Describe an environmental report, including its purpose and contents, and discuss the potential advantages of an environmental report for Hoppo and its shareholders. (10 marks) (c) Briefly explain how internal controls can be strategic in nature. Explain, using detailed examples from the case, why developing sound internal controls over the supply and processing of TY13 would be important if Hoppo opted to build its own factory in Yuland. (10 marks) (d) Draft the press release as discussed in the case. It should: (i) Define and explain the importance of integrity and transparency in the context of the case. (6 marks) (ii) Construct an argument against paying the bribe to the mayor of Ootown from both business and ethical perspectives. Your ethical arguments should include both deontological and consequentialist perspectives. (10 marks) Professional marks will be awarded in part (d) for the format, tone, logical flow and persuasiveness of the press release. (4 marks) Q2 (a) Discuss the importance of internal audit in a highly regulated industry such as the water industry that Blup Co operates in. (7 marks) (b) (i) Criticise the ways in which Blup Cos audit committee has failed to meet best practice. (ii) Explain why the audit committee is responsible for overseeing the internal audit function. The total marks will be split equally between each part. (12 marks) (c) Discuss how effective internal controls can provide assurance on the integrity of financial reporting. (6 marks) Q3 (a) Explain the meaning of risk assessment as used by Ron Ng and discuss, in the context of the case, the need for risk assessment to be continuous and ongoing. (8 marks) (b) Describe fiduciary duty in the context of the case and critically evaluate the issues raised by Ron Ngs belief. (7 marks) (c) Explain the term financial risk and discuss how management of these risks can be embedded in a large organisation such as BigBank. (10 marks)

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Q4 (a) Explain what is meant by a code of corporate governance and discuss the general purposes of such a code in listed companies such as Boom Co. (7 marks) (b) Propose how the components of a reward package might be balanced to incentivise medium to long-term growth whilst retaining the existing executive board in place as long as possible. (8 marks) (c) Briefly explain the general roles of non-executive directors in a listed company such as Boom Co, and discuss why non-executive directors should not receive performancerelated elements in their rewards as Sam South enquired. (10 marks)

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