ITPEC FE Morning April 2022 Question 75

The responsibility to explain the content and results of business activities to shareholders and other stakeholders — accountability at the executive level.

Shareholders entrust their capital to management, and customers, employees and society are affected by what the company does. Management therefore owes them an explanation of what it did with the resources and what came of it. Accountability is this duty to explain; disclosure, IR and compliance are ways of meeting related duties.

Answer (a)

Why not others:

• •(b) — measuring the cost and effect of environmental conservation and publishing them periodically is environmental accounting
• •(c) — providing investors and analysts with accurate, timely information for investment decisions is IR (investor relations) or timely disclosure, one channel of explanation aimed at investors only
• •(d) — setting up rules, manuals and checks based on corporate ethics and running the company within the law is compliance

Key rule: Accountability is the duty to explain to stakeholders; compliance is obeying the rules, IR is informing investors, and environmental accounting reports environmental costs.

Corporate Activities · AI-written, may contain errors