Which one of the following statements is TRUE?
A) One tool of corporate governance is the use of accounting control systems.
B) An example of asset switching is an option to exchange one piece of real estate for another.
C) One tool of corporate governance is the location of the company headquarters.
D) An example of an agency relationship is when a supervisor hires a forklift operator.
E) One tool of corporate governance is a company's tax avoidance strategy.

Question

Quizplus · Accepted Answer

Accounting control systems are a tool of corporate governance used to monitor and control financial activities within a company. Asset switching (B) refers to the process of exchanging one type of asset for another, not necessarily real estate. The location of the company headquarters (C) may impact corporate governance, but it is not a specific tool. An agency relationship (D) is a relationship where one party (the principal) hires another party (the agent) to act on their behalf. A tax avoidance strategy (E) may impact a company's finances, but it is not a tool of corporate governance.

Which One of the Following Statements Is TRUE