Exam 19: Rewards, Incentives and Risk Management

Which of these is not a framework available to Australian top management when considering risk management?

To reduce agency costs, organisations implement various systems and controls to monitor behavior, including

Agency theory is related to accounting because organisations incur costs, including the costs to produce accounting information, to solve conflicts that might arise between managers and owners.

According to the CoCo (criteria of control) guidance on control integrated framework, a catastrophic computer failure would be classed as which category of risk?

Which of these researchers argued that extrinsic rewards do little in the long term to foster superior performance?

It is common in accounting to define a 'long-term' view as

Relative performance evaluation (RPE), in relation to incentive systems, is about the comparison of company performance, using suitable measures, against the performance of a peer group.

Managers can best reduce agency costs by

Over the last 10-15 years there has been a decline in the use of share options as a component of executive remuneration.

Costs for producing and analysing internal performance reports are an example of which type of agency costs?

Which of these is not one of the four categories contained in the CoCo (criteria of control) guidance on control integrated framework?

To protect shareholders from excessive compensation practices, executive compensation packages are best set by

Because agents may not set the same goals and objectives as principals, organisations may experience which of the following general agency costs?

According to agency theory, under what circumstances could companies eliminate agency costs?

From a business owner's perspective, which of the following is an agency cost?

"Reduce costs by 5%" is an example of a(n)

It is more likely that the performance of a top executive will be measured at which of these levels?

The main thrust of Australian government regulations concerning the payment of senior executives has been to ensure that payment is kept at a reasonable level.

Compensation contracts prepared to deal with the agency problem can be based on accounting and/or non-accounting measurements.

Whether compensation is structured to focus on the long-term depends on two key factors, firstly, the time horizon relating to the target measure and secondly, the 'lasting' nature of the reward itself.