Exam questions: Corporate governance, ethics and financial statments

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BUS 503

Account for Manager


Final exam

Question 1

Financial managers got to have make sure their shareholders to get their fully investments. As nowadays most of the major business institutions take action to upgrade all their financial system, technologies, innovates more different type of products and services to fulfill customer expectation. In the meantime these kinds of products most particularly in developing countries and apparently need to utilize all the resources, the financial strategies, process and restructure their production and processes must be executed. From this cases as Dalkon Shield financial managers must need to take intimately action for any necessary changes effectively to any kind of continuously developing of the company growth.

Financial managers necessity ensure all following responsibilities:

Maximize the shareholders wealth of full investment-

Financial managers has faced many different kind of activities such as cash management, acquisition the funds, allocating and raising the financial capital or taking into the account for trading off between the risk and return that can bring up profits or values to the company and shareholders in order any part of them getting any major financial losses that associated with these products. Financial manages execute many different type of strategic plans to the top of management for development of strategies and implementation of plans and inform providers as well.

Maximize stock price of the common stocks and shareholders receive their entitle maximize returns of their investment plans-

Financial managers will increase and create from many different activities such as financing, networking and budgeting for buying assets for create more cash value than they cost. Alternative way is sell stocks or bonds that generate more finances than their costs. Financial managers will keep the balance in healthy way in between of the shareholders and the company. As we know that company already get experience for maximizing their business under with expertise of the generation of financial system.

Identify and present the most important features of those products with well planning how to sell the products in certain amount of value-

There are few great tools as cope with the challenges of the products placement such as product, market, competitor analysis, cost and market analysis, focus on channel distribution and customer satisfactions. Beside nowadays consumers and environmental analysis plays a very important role to connect and form relationships with finances, customers and distribution channels. Though business network enhance the financial managers effectively contribute financing strategies and supply management support

Corporate governance-

This structure means to help control all the system of the guidance, corporate finance and other aspects. We understand the good corporate governance will effective assist the financial management meet the targets of their operations and determine the approaches of the attaining the targets. Corporate governance influences the efficiency of the company products at the corporate level that shapes up the economic performance at a certain level. Standard the agency theory illustrates the corporate governance problem and how the equity and debit holders influence the managers to perform the best interest of the providers of capital. Therefore it can highly extend the shareholders and creditors induce managers of maximize the company value and improve the efficiency that firms allocate the resources as well.

Roles of Ethics-

Nowadays in general business and financial community are particular developing and reinforcing the ethical standards –as the moral judgment or the standard of conduct. Financial mangers need to follow certain ethical standards for ensuring all the statement and the financial transactions are correct, legal and true. Business ethics is the company attitude conduct toward between with customers, employees, stockholders and community.

Code of Ethical –

This is very important for applicable to all level of the senior management. Financial managers must act with ethical with integrity and honesty for avoiding any apparent conflicts that between business, personal and any professional relationship. Financial Managers make all decisions based on rational, objective business analysis instead of having any other inappropriate factors such as sex, race or religion.

Consequences of unethical behavior -

Unethical behavior can led the company bankruptcies as pass few years ago and its definitely hurt the reputation and good will of the company. Most likely the company stock price will rapidly decline or fail. These kinds of frauds also contributed to fatal wound to others and the whole industries.

Ethical objective of the company-

Financial management objective not only maximize the stockholder wealth but also need to make interest in their employees’ welfare, welfare of management, their own personal satisfaction, in consumers’ services and supplier relationship, in good responsibility of their communities and societies as well.

Ethical principle in financial management-

The most legal challenges for the financial managers that must be keep obeyed, honesty, intellectual property laws that regulate the use of others idea and to be more fair treatment to employees, shareholders, consumers and society. There will be many legal considerations for the safety environmental concern and pollution control system. They have to be take more responsibilities on human rights and respect to the all kind of ethical concerns to shareholders, consumers and society


  1. Cengage Learning, Contemporary Financial Management, 01 Jan 2012,P 16-17
  2. Corporate ethics and sarbances-oxley, Frank Navran and Edward L. Pittman, Dec 31 2003, available at: www.ethics.org/resource-corporate-ethics and sarbanes-oxley/
  3. Eugene Brigham, Michael Ehrhardt, Financial Management: Theory & Practice, Jan 2013, Chapter 1 P9-13
  4. Eugene F Brigham, Joel F. Houston, Fundamental of Financial Management, 2007, Chapter 1, P6-17
  5. Robert Introduction to Managerial Finance, available at: www.wpw.aw.com.wps.media. Objects/

Question 2

In this case ethical is one of the main consideration topics we are concerned issue. These involved in the dumping was unethical way and very clear proof that money is the main driver issue in this case. As the international law that company’s dumping as it mean the foreign price must either lower its marginal cost or below its domestic price. From this case situation the low cost is engaged in the long-term strategies that will definitely influence in the domestic consumers and harm the domestic industry. According to the cases as those children would get those fire-retardant pajamas, they would rather not admit that those chemical toxic causes damage their health. The main facts as manufacturers still dump the clothes price so they could use low price buy up all selling into oversea markets in low price for keep making their profit avoiding any loss. Although those people could spend less to buy those clothing but they should still aware of their health as those clothes did contain the harmful chemical.

Same as the exportation of the Dalkon Shield, there were many serious and unethical problems occurs as manufactures dump products for least hope for avoiding any financial losses among between the shareholders and the company. These planning strategies of exportation have many social and safety responsibility inside. Dalkon Shield devices claimed that have many side effects cause pelvic inflammation, blood poisoning, tubal pregnancies etc. but still sold those to the other high population of countries. Even though there were high dying rate during the childbirth in the World third countries. This kind of medical devices had caused much different serious type of harm to women health. Many victims suffered from those medical devices due to lack of government protection for consumers that allowed manufacturers still sell those improper medical devices still usage in the states and also even sold to the other world third counties. Those pharmacy organizations initial testing conducted in the third world due to the low safe control level and less civil law suit as well. Therefore those manufacturers enter into the Third world markets first for selling their products before getting approved in western countries. Therefore the Third world is not only use as laboratory as guinea pigs and also as dumping those dangerous goods as well (Bryan, 1981; Clinard, 1990).

From all the above cases we understand the organizations have to get following issues to having more ethical theoretical in their business environment:

Avoid any conflict of interest- modern researchers and engineers who are more financial concerns to those consultants, inventors and stockholders that eventually came to dominate their ethical concern as the scientists. To prevent any improper personal benefits involved at every level of the organization. All type of policies must be list out what situations to be unethical conflicts and charge a committee with the responsibility of implementing the policy by screening for the conflicts listed. Financial and any other people in the organizations must be avoid to having any interest of other businesses and need to establish the business environment between with the company or competitors. Company need to enhance the corporate responsibility and opportunities. That clearly explains that everyone must disclose if have any outside activities, financial interest or relationship with any competitors.

Sustainable development -Whatever if those organizations prolong their sustainable development that means they understand will be much better for the economics, environmental and social issues. That is very important for the organizations to identify the current and future business environment. Rapid economic growth most likely will exhaust nature resources and create environmental problems for our next generation future generations. Therefore the organizations need to take the responsibilities to improve the social progress, environmental protection, more care use of the nature resources that may involve different part of issue to support such as government policy, absorption rates, health and safety requirement, populations growth, labor availabilities etc. This can ensure provide a strong and healthy to society that provides better business environment to make better decisions on all kind of issues that affect our lives.


  1. Designing popularity of Dalkon Shield, Kathryn Goldberg, 2012, Avail at: www.etd.ohiolink.edu/!etd.send_file/
  2. Lawful but awful: ‘Legal Corporate Crimes, Nikos Passas, 2001, Avail at: www.academia.edu/2556782/Lawful_but_Awful_corporate_practices/
  3. Sustainable growth, Economic online , Avail at: www.economicsonline.co.uk/Managing_the_economy/Sustainable_growth.html
  4. The Dalkon Shield, Roberta Bloss, Joseph Corneli, Chris Moon, 1997 Avail at: www1.umn.edu/scitech/dalkfina.htm

Question 3a

Deavours Photography, Inc

Balance Sheet

December 31, 2009


Cash $2,000 Account payable $5,000

Prepaid insurance 2,000 Salaries payable 900

Office Supplies 600 Unearned service

Office equipment 16,000 revenue 2,500

Less Accumulated Total liabilities 8,400

Depreciation 3,000 13,000 STOCKHOLDERS EQUITY

Common stock 5,000

Retain earnings 4,200

Total stockholders equity 9,200

Total liabilities

Total assets $17,600 and stockholders equity $17,600

Question 3b

  1. L (Last-in, First out)
  2. F (First in, First out)
  3. S (Specific unit cost)
  4. F (First –in, First-out)
  5. L (Last-in, First-out)