The Sarbanes-Oxley Act improves corporate governance of MNCs because it: makes e

Question

The Sarbanes-Oxley Act improves corporate governance of MNCs because it: makes executives more accountable for verifying financial statements. eliminates stock options as a form of compensation. ties executive compensation to firm performance. places a limit on the amount of funds that managers can spend The commonly accepted goal of the MNC is to: maximize short-term earnings, maximize shareholder wealth, minimize risk. both maximize short-term earnings and minimize risk, maximize international sales.

Explanation / Answer

(19)

The Sarbanes-Oxley Act improves corporates governance of MNCs because it makes executives more accountable for verifying financial statements. It helps the companies to take risk which could be minimised by planning the financial matters properly with improved government policies for traders and manufacturers. It helps in providing flexibility in conducting financial accountibility of the companies. It has helped in business development in under-developed states with companies of pewerful states which helped in growth and expansion of the former.

(20)

The commonly accepted goal of the MNC is to maximise the shareholders wealth. The investment is made by different share holders which conducts the busienss on a large capital-scale. They tend to increase the revenues by bringing shares on public platfirm where people could buy bonds and invest money on the name of the company. The market trend rise or fall according to the economy of the country and its market value across the world. The revenues earned by the company goes to increasing distribution of wealth of the shaeholders who have invested the capital into business.

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