ETHICAL OBLIGATIONS AND DECISION
MAKING IN ACCOUNTING TEXT AND CASES
ACTUAL EXAM PAPER 2026 QUESTIONS
SOLUTIONS GRADED A+
◉ What is corporate governance?
Answer: The system used to direct and control an organization.
◉ What is the purpose of corporate governance?
Answer: To ensure accountability, fairness, and transparency in
company management.
◉ Who are stakeholders?
Answer: Individuals or groups affected by an organization's
decisions.
◉ What role does the board of directors play?
Answer: They oversee management and protect shareholder
interests.
◉ What is an audit committee?
,Answer: A subgroup of the board responsible for overseeing
financial reporting and audits.
◉ What is "tone at the top"?
Answer: The ethical example set by senior leadership.
◉ Why is tone at the top important?
Answer: It influences the ethical culture of the entire organization.
◉ What is an ethical corporate culture?
Answer: An environment where ethical behavior is expected and
reinforced.
◉ What are internal controls?
Answer: Policies and procedures designed to ensure reliable
financial reporting and compliance.
◉ Why are internal controls important?
Answer: They help prevent and detect fraud and errors.
◉ What is a whistleblowing system?
Answer: A process allowing employees to report unethical behavior.
, ◉ What is a code of ethics?
Answer: A formal statement of an organization's ethical values and
expectations.
◉ What is corporate social responsibility?
Answer: A company's obligation to act ethically and contribute to
society.
◉ What is ethical leadership?
Answer: Leadership that demonstrates honesty, integrity, and
accountability.
◉ What is stakeholder theory?
Answer: The idea that businesses must consider the interests of all
stakeholders.
◉ What is agency theory?
Answer: The conflict that arises when managers act in their own
interests instead of shareholders'.
◉ What is management's responsibility in governance?
MAKING IN ACCOUNTING TEXT AND CASES
ACTUAL EXAM PAPER 2026 QUESTIONS
SOLUTIONS GRADED A+
◉ What is corporate governance?
Answer: The system used to direct and control an organization.
◉ What is the purpose of corporate governance?
Answer: To ensure accountability, fairness, and transparency in
company management.
◉ Who are stakeholders?
Answer: Individuals or groups affected by an organization's
decisions.
◉ What role does the board of directors play?
Answer: They oversee management and protect shareholder
interests.
◉ What is an audit committee?
,Answer: A subgroup of the board responsible for overseeing
financial reporting and audits.
◉ What is "tone at the top"?
Answer: The ethical example set by senior leadership.
◉ Why is tone at the top important?
Answer: It influences the ethical culture of the entire organization.
◉ What is an ethical corporate culture?
Answer: An environment where ethical behavior is expected and
reinforced.
◉ What are internal controls?
Answer: Policies and procedures designed to ensure reliable
financial reporting and compliance.
◉ Why are internal controls important?
Answer: They help prevent and detect fraud and errors.
◉ What is a whistleblowing system?
Answer: A process allowing employees to report unethical behavior.
, ◉ What is a code of ethics?
Answer: A formal statement of an organization's ethical values and
expectations.
◉ What is corporate social responsibility?
Answer: A company's obligation to act ethically and contribute to
society.
◉ What is ethical leadership?
Answer: Leadership that demonstrates honesty, integrity, and
accountability.
◉ What is stakeholder theory?
Answer: The idea that businesses must consider the interests of all
stakeholders.
◉ What is agency theory?
Answer: The conflict that arises when managers act in their own
interests instead of shareholders'.
◉ What is management's responsibility in governance?
