CFE – Fraud Prevention and Deterrence — Question 37

Which of the following is FALSE regarding G20/OECD Principles of Corporate Governance (the Principles)?

Answer options

• A. The Principles are intended to be applicable in both developed economies and emerging markets
• B. The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them
• C. The Principles state that an entity’s corporate governance framework should ensure the equitable treatment of all shareholders
• D. The Principles state that an entity’s corporate governance framework should encourage active cooperation between corporations and stakeholders in creating wealth

Correct answer: A

Explanation

Option A is correct because the Principles are not mandatory; they are intended as guidelines rather than requirements. Option B is incorrect as the Principles are not legally binding and thus do not need to be implemented by all corporations. Options C and D correctly reflect the Principles' focus on equitable treatment of shareholders and collaboration with stakeholders.