Past Questions & Answers
- 5 Marks
SCS – Nov 2024 – L3 – Q5c – Board Independence and Accountability in Corporate Governance
Evaluation of how the governance structure at BOGML affects board independence and accountability.
Question
There are a number of concepts of good corporate governance that every entity, including BOGML, must strive to adhere to.
Required:
Provide an evaluation of how the existing corporate governance structure at BOGML may undermine or compromise the following key concepts of good corporate governance, with particular reference to the current composition and organisation of the board.
i) Independence
ii) Responsibility and accountability
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- 10 Marks
SCS – Nov 2024 – L3 – Q5b – Board Responsibilities in Corporate Governance
Evaluate the role of the board in corporate governance, focusing on responsibilities for strategy, oversight, and ethical leadership.
Question
The role of the board of directors is critical in corporate governance. The National Corporate Governance Code for Ghana (the National Code) issued in November 2022 outlines the board’s core responsibilities.
Required:
Advise the board of BOGML on the FIVE key responsibilities of the board of directors as outlined in the National Code.
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- 10 Marks
SCS – Nov 2024 – L3 – Q5b – Board Responsibilities in Corporate Governance
Identify and explain the five governance pillars in the National Corporate Governance Code for Ghana 2022.
Question
It is evident that all is not well with the current corporate governance at BOGML. However, for the company to achieve sustainable growth and remain competitive, it must adhere to sound corporate governance principles.
Required:
Using the FIVE governance pillars identified in the National Corporate Governance Code for Ghana 2022 (the National Code), issued in November 2022 by the Institute of Directors-Ghana, advise the company on how to improve upon its current governance structure.
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- 10 Marks
SCS – Nov 2024 – L3 – Q4c – Forward Rate Agreement for Interest Rate Risk Management
Calculation of settlement amount for FRA under different Ghana Reference Rate (GRR) scenarios.
Question
The company has decided to use a Forward Rate Agreement (FRA) to manage its interest rate risk likely to arise from the short-term loan of GH¢15 million it intends to borrow in three months for a period of six months.
Required:
i) What is the purpose for a company to enter into an FRA arrangement? (2 marks)
ii) Calculate the amount of money that will be paid to settle the FRA at the beginning of the FRA period if, at the end of month 3, when the FRA becomes effective, the six-month Ghana Reference Rate (GRR) is as follows:
a) 37.50%
b) 28.50%
In each case, clearly state the party (i.e. FRA buyer or FRA seller) responsible for making the payment.
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- 5 Marks
SCS – Nov 2024 – L3 – Q4b – International Tax Considerations
Key tax issues for BOGML’s planned international expansion to minimize total group tax payable.
Question
The company is planning to expand its operations to Tanzania and South Africa in 2026. As a result, transactions between the head office in Ghana and the prospective foreign subsidiaries will likely take place, leading to potential international tax implications.
Required:
Briefly identify and explain TWO key issues to consider for the company to minimise total tax payable on the group profits.
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