Part -1:
Que 1) Which of the following is true for company directors?
Select one:
a. Shareholder wealth maximisation is an idealised standard of conduct.
b. Shareholder wealth maximisation is a legal mandate.
c. Shareholder wealth maximisation is a legal mandate in some countries.
d. All of the above.
e. None of the above.
Que 2) Which of these is a true description of ‘creative compliance'?
Select one:
a. It involves exploiting the complexity, technicalities, and loopholes in the law.
b. It can also be termed ‘creative tax accounting' or ‘earnings management'.
c. It works by accountants exercising discretion over the accounting numbers without violating generally accepted accounting principles.
d. All of the above.
e. None of the above.
Que 3) What makes it difficult for a member of public to understand whether or not a company pays its fair share of tax?
Select one:
a. The corporate tax codes of many large industrialised countries are extremely complex.
b. The existence of inter-country taxation agreements.
c. The private nature of company negotiations with the tax authorities.
d. All of the above.
e. None of the above.
Que 4) ‘Tax sovereignty', or, the ability of a government to use its tax laws to regulate companies and get them to help fund its social objectives, depends on:
Select one:
a. The credibility of the government to set appropriate rules for corporate taxation.
b. The government's ability to administer the tax system fairly and efficiently.
c. Spending revenues wisely.
d. All of the above.
e. None of the above.
Que 5) Resources lost from corporate tax evasion strategies could be used to improve social infrastructure and quality of life for millions of people.
Select one:
a. True
b. False.
Que 6) At the heart of tax avoidance is the advantage to MNCs of operating in multiple locations, allowing them to organise their affairs in order to realise profits in countries with the most favourable tax regimes.
Select one:
a. True
b. False.
Que 7) Which of the following is part of Smith's (1776, as quoted in Dowling, 2014) ‘cannons of taxation' for an ideal tax system?
Select one:
a. Proportionality.
b. Certainty.
c. Convenience of payment.
d. Efficiency.
e. All of the above.
Que 8) Corporate tax avoidance has been enhanced by the intensification of globalisation, because in the integrated market structure most countries have accepted that corporations could reside concomitantly in more than one jurisdiction.
Select one:
a. True
b. False.
Que 9) Which of the following is used by companies to avoid corporate tax?
Select one:
a. Transfer pricing.
b. Royalty programmes.
c. Offshore tax heavens.
d. Carefully structured transactions.
e. All of the above.
f. None of the above.
Que 10) Which of the following can be seen as barriers to a change in corporate culture in terms of how companies view their obligation to pay tax appropriately?
Select one:
a. Systemic pressures to maximise profits.
b. Share prices.
c. Executive financial rewards.
d. All of the above.
e. None of the above.
Part -2:
Que 1) Sikka (2010) terms corporations' tax avoidance strategy as an ‘organised hypocrisy'. Would you agree? Give reasons for your choice.
Que 2) What are the main costs of tax avoidance?
Que 3) What is the ‘key issue' surrounding tax avoidance?