Corporate scandals at firms such as Enron,WorldCom and the Italian firm Parmalat
A)show that managers might be tempted to pursue their own private interests at the expense of shareholders.
B)show that Italian shareholders are better at monitoring managerial behavior than U.S.shareholders.
C)show that white-collar criminals hardly ever get punished.
D)show that socialism is a better way to go than capitalism.

Question

Quizplus · Accepted Answer

The corporate scandals at firms such as Enron, WorldCom, and Parmalat depict a significant problem in corporate governance where managers get tempted to pursue their own private interests at the expense of shareholders. The corporate governance mechanisms restrict such deviations by ensuring diligent monitoring of managerial behavior.

Corporate Scandals at Firms Such as Enron,WorldCom and the Italian