Tesco was forced to restate its earnings for the first half of 2014 to 431 million USD because senior managers in the U.K.food business had booked income early and delayed the booking of costs in order to improve appearances of financial performance.This scandal results from ________ and ________.
A) poor environment; management systems
B) poor governance; control
C) external environmental factors; internal environmental factors
D) leadership; financial systems

Question

Quizplus · Accepted Answer

Strategic control is the process of monitoring and correcting the strategy and performance of a firm. Two central aspects of strategic control are informational control (the ability to respond effectively to environmental change) and behavioral control (the appropriate balance and alignment among the culture, rewards, and boundaries of a firm). In the case of Tesco, good governance is imperative. Shareholders and the board of directors must ensure that company management team members strive to fulfill their fiduciary duty of maximizing long-term shareholder value. As we just saw in the Tesco example, poor governance and control can lead to damaging scandals in firms.

Tesco Was Forced to Restate Its Earnings for the First