LOCATION: IUMW, CITY CAMPUS

LEVEL 6

FINAL ASSESSMENT PERIOD

MODULE CODE: BAC6013

ANSWER ALL QUESTIONS

INSTRUCTIONS
The following questions must be completed and submitted electronically via Turnitin using word
processing software. All writing should be academic in style, formal, focused, concise and subject
specific. It should use a font of Times New Roman 12 with 1.5 paragraph.
The questions will be posted via Google classroom on the 16.6.2022 at 2.00pm.
Submission deadline is on the 17.6.2022 at 2.00pm.
Submission must be completed via Turnitin.com
All submissions will be checked via the turnitin report in relation to unfair practice for similarity,
potential collusion and contract cheating (that is buying from essay mills etc)
You must complete a written essay (approximately XXX- XXX words excluding references and
bibliography) for five questions that synthesises and evaluates the task. All questions carry equal
marks.

You must state the number of words used at the end of each answer. You may include diagrams,
figures appendices etc. without word penalty.
Clear pointers to students for answering the questions:
• Structure your answers.

• Use headings/subheadings in your work where appropriate.

• Include definitions, discussions and explanations on key concepts.

• Where appropriate include diagrams.

• Your work must include application to organisations and sectors/industries in the form
of evidence/examples in all your answers, which is key throughout.

• Your work must contain evidence of logical, analytical thinking and evaluation. For
example, you must examine and break information down into parts, make inferences,
compile, compare and contrast information. This means not just describing What! but
also justifying: Why? How? When? Who? Where? At all times, you must provide
justification for your arguments and judgements.

• Include references for your work using either APA or Harvard (you do not have to
include a reference list at the end of each answer
ANSWER ALL QUESTIONS (100 Marks)

QUESTION 1
The country of Newland suffered a high number of high-profile company failures following a
financial crisis which resulted in a general loss of business confidence.

Emerging from this, proposals were made to amend the corporate governance code with
necessary changes to address these concerns.

In Newland even before a new code was published, there were arguments of whether corporate
governance provisions should be rule-based or remain principle-based as it exists currently.

An elected legislator, Charles Darwin whose constituency faces rising unemployment resulting
from a number of company failures claimed that this would have been avoidable had the
directors be legally accountable for corporate governance provisions.

He further reiterated that you cannot wait for the market to react and punish bad practices as
this had been the initial problem and that Newland should revert to the rule-based jurisdiction
as the current “comply or explain” was ineffective means of corporate governance control.

Mr Darwin having been upset by the company failures within his constituency attributed this
to the lack of sound corporate governance thus causing important companies to fail and causing
the loss of jobs it supported, and that a new code will make it more difficult for companies to
fail.

A principle-based new code was issued with added provisions to reduce the re-election period
of all directors from three to one year and that “sufficient biographical on each director to allow
shareholders to make an informed decision” and all these measures were to foster greater
accountability.

Required
(a) Assess how sound corporate governance can make it more difficult for companies to fail,
clearly explaining what 'corporate governance' means in your answer. (15 marks)

Charles Darwin believes that Newland should become a rules-based jurisdiction because the
current 'comply or explain' approach is ineffective as a means of controlling corporate
governance.

Required
(b) Evaluate the difference between rules-based and principles-based approaches to corporate
governance regulation, and argue against Charles Darwin’s belief that 'comply or explain' is
ineffective. (10 marks)
(c) Evaluate 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. (10 marks)

[35 Marks]

QUESTION 2
In a period of 3 years, Negara being a large defence contractor suffered massive losses and was
on the brink of collapse brought about by a series of internal control failures.

The shareholders in averting company failure decided to replace the board of directors with
new directors.

The new directors in wanting to avoid a recurring issue decide that it needs to be more focussed
on the operation of internal controls and ensuring that relevant corporate governance
requirements are adhered to.

The directors understood that one dominant problem over the last few years was the total failure
of its information system and to review its control adequately, a better information system is
needed.

They also noted that the previous board of directors had no feedback on employees concern
and when indeed notified, subsequent action taken after the control failures was too late to
make an impact.

The new directors are now showing greater concern on how Negara deals with changes in the
risks that the company is exposed to since this is a major concern of its shareholders.

Required

(a) Advise the new board of the key responsibilities of board members in relation to ensuring
the effectiveness of internal controls. (15 marks)

(b) Propose the methods used to assess the effectiveness of controls and advise the board on
the information required to support a fair assessment. (10 marks)

(c) Explore how the board should ensure that Negara is responsive to significant changes in the
risks that it faces. (10 marks)

[35 Marks]
QUESTION 3
The IFAC code of professional ethics (2009), adopted as being relevant to ACCA members
and students, contains the following advice.

[A professional accountant in business or an immediate or close family member may be offered

Anita Mui, a qualified accountant who also holds the position of Executive Director in a large
public listed company was responsible for the award of large outsourcing contracts.

She began to look for other means of supplementing her income when her family fell into bad
debts.

Sensing an opportunity coming her way when her company intended to award a large
outsourced service, she accepted a bid from one supplier without the company necessity of
calling for tender when the supplier entice her with a $50,000 “thank you” gift upon successful
award of the contract.

She had convinced herself that this gift was justified as she worked hard to get her accounting
qualification and she owed her present job to this.

Further-more she felt that she had invested a great deal of time and effort in qualifying as a
professional accountant and she is entitled to a “higher personal return” as a result of this.

Required

(a) Critically assess 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. (15 marks)

(b) Criticize Anita Mui's beliefs and behaviour, and explain why accepting the $50,000
conflicts with her duty to uphold the public interest. (15 marks)
[30 Marks]

**END OF QUESTION PAPER**