POP QUIZ

Agency theory is the relationship between principal and agent. The principal refer to?

• Manager

• CEO

• Management

• Sharegolders

Below are agency cost EXCEPT?

• Bonding cost

• Cost of external auditor

• Residual loss

• Adverse selection

The objectives of shareholders theory is to balance the shareholders financial interest against the financial interest of other stakeholders.

• TRUE

• FALSE

One of the reason for managerial hegemony theory is characteristics of the directors (eg passive director). What is passive director?

• Lazy director and having to many excuse

• Lack of knowledge of company because too depends on management

• Having too many directorship for a few company (interlocking director)

• Play safe to secure their position as director

One of the CG mechanism is an audit committee. What is the internal control enforcement of audit committee of a company?

• Establish code of best practice

• Appoint an external auditor

• Established internal audit

• Provide a good remuneration package