1. World Standards Day

Answer: 2017-10-14 00:00:00

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MCQ-> Read carefully the four passages that follow and answer the questions given at the end of each passage:PASSAGE I The most important task is revitalizing the institution of independent directors. The independent directors of a company should be faithful fiduciaries protecting, the long-term interests of shareholders while ensuring fairness to employees, investor, customer, regulators, the government of the land and society. Unfortunately, very often, directors are chosen based of friendship and, sadly, pliability. Today, unfortunately, in the majority of cases, independence is only true on paper.The need of the hour is to strengthen the independence of the board. We have to put in place stringent standards for the independence of directors. The board should adopt global standards for director-independence, and should disclose how each independent director meets these standards. It is desirable to have a comprehensive report showing the names of the company employees of fellow board members who are related to each director on the board. This report should accompany the annual report of all listed companies. Another important step is to regularly assess the board members for performance. The assessment should focus on issues like competence, preparation, participation and contribution. Ideally, this evaluation should be performed by a third party. Underperforming directors should be allowed to leave at the end of their term in a gentle manner so that they do not lose face. Rather than being the rubber stamp of a company’s management policies, the board should become a true active partner of the management. For this, independent directors should be trained in their in their in roles and responsibilities. Independent directors should be trained on the business model and risk model of the company, on the governance practices, and the responsibilities of various committees of the board of the company. The board members should interact frequently with executives to understand operational issues. As part of the board meeting agenda, the independent directors should have a meeting among themselves without the management being present. The independent board members should periodically review the performance of the company’s CEO, the internal directors and the senior management. This has to be based on clearly defined objective criteria, and these criteria should be known to the CEO and other executive directors well before the start of the evolution period. Moreover, there should be a clearly laid down procedure for communicating the board’s review to the CEO and his/her team of executive directors. Managerial remuneration should be based on such reviews. Additionally, senior management compensation should be determined by the board in a manner that is fair to all stakeholders. We have to look at three important criteria in deciding managerial remuneration-fairness accountability and transparency. Fairness of compensation is determined by how employees and investors react to the compensation of the CEO. Accountability is enhanced by splitting the total compensation into a small fixed component and a large variable component. In other words, the CEO, other executive directors and the senior management should rise or fall with the fortunes of the company. The variable component should be linked to achieving the long-term objectives of the firm. Senior management compensation should be reviewed by the compensation committee of the board consisting of only the independent directors. This should be approved by the shareholders. It is important that no member of the internal management has a say in the compensation of the CEO, the internal board members or the senior management. The SEBI regulations and the CII code of conduct have been very helpful in enhancing the level of accountability of independent directors. The independent directors should decide voluntarily how they want to contribute to the company. Their performance should decide voluntarily how they want to contribute to the company. Their performance should be appraised through a peer evaluation process. Ideally, the compensation committee should decide on the compensation of each independent director based on such a performance appraisal. Auditing is another major area that needs reforms for effective corporate governance. An audit is the Independent examination of financial transactions of any entity to provide assurance to shareholder and other stakeholders that the financial statements are free of material misstatement. Auditors are qualified professionals appointed by the shareholders to report on the reliability of financial statements prepared by the management. Financial markets look to the auditor’s report for an independent opinion on the financial and risk situation of a company. We have to separate such auditing form other services. For a truly independent opinion, the auditing firm should not provide services that are perceived to be materially in conflict with the role of the auditor. These include investigations, consulting advice, sub contraction of operational activities normally undertaken by the management, due diligence on potential acquisitions or investments, advice on deal structuring, designing/implementing IT systems, bookkeeping, valuations and executive recruitment. Any departure from this practice should be approved by the audit committee in advance. Further, information on any such exceptions must be disclosed in the company’s quarterly and annual reports. To ensure the integrity of the audit team, it is desirable to rotate auditor partners. The lead audit partner and the audit partner responsible for reviewing a company’s audit must be rotated at least once every three to five years. This eliminates the possibility of the lead auditor and the company management getting into the kind of close, cozy relationship that results in lower objectivity in audit opinions. Further, a registered auditor should not audit a chief accounting office was associated with the auditing firm. It is best that members of the audit teams are prohibited from taking up employment in the audited corporations for at least a year after they have stopped being members of the audit team.A competent audit committee is essential to effectively oversee the financial accounting and reporting process. Hence, each member of the audit committee must be ‘financially literate’, further, at least one member of the audit committee, preferably the chairman, should be a financial expert-a person who has an understanding of financial statements and accounting rules, and has experience in auditing. The audit committee should establish procedures for the treatment of complaints received through anonymous submission by employees and whistleblowers. These complaints may be regarding questionable accounting or auditing issues, any harassment to an employee or any unethical practice in the company. The whistleblowers must be protected. Any related-party transaction should require prior approval by the audit committee, the full board and the shareholders if it is material. Related parties are those that are able to control or exercise significant influence. These include; parent- subsidiary relationships; entities under common control; individuals who, through ownership, have significant influence over the enterprise and close members of their families; and dey management personnel.Accounting standards provide a framework for preparation and presentation of financial statements and assist auditors in forming an opinion on the financial statements. However, today, accounting standards are issued by bodies comprising primarily of accountants. Therefore, accounting standards do not always keep pace with changes in the business environment. Hence, the accounting standards-setting body should include members drawn from the industry, the profession and regulatory bodies. This body should be independently funded. Currently, an independent oversight of the accounting profession does not exist. Hence, an independent body should be constituted to oversee the functioning of auditors for Independence, the quality of audit and professional competence. This body should comprise a "majority of non- practicing accountants to ensure independent oversight. To avoid any bias, the chairman of this body should not have practiced as an accountant during the preceding five years. Auditors of all public companies must register with this body. It should enforce compliance with the laws by auditors and should mandate that auditors must maintain audit working papers for at least seven years.To ensure the materiality of information, the CEO and CFO of the company should certify annual and quarterly reports. They should certify that the information in the reports fairly presents the financial condition and results of operations of the company, and that all material facts have been disclosed. Further, CEOs and CFOs should certify that they have established internal controls to ensure that all information relating to the operations of the company is freely available to the auditors and the audit committee. They should also certify that they have evaluated the effectiveness of these controls within ninety days prior to the report. False certifications by the CEO and CFO should be subject to significant criminal penalties (fines and imprisonment, if willful and knowing). If a company is required to restate its reports due to material non-compliance with the laws, the CEO and CFO must face severe punishment including loss of job and forfeiting bonuses or equity-based compensation received during the twelve months following the filing.The problem with the independent directors has been that: I. Their selection has been based upon their compatibility with the company management II. There has been lack of proper training and development to improve their skill set III. Their independent views have often come in conflict with the views of company management. This has hindered the company’s decision-making process IV. Stringent standards for independent directors have been lacking...
MCQ-> Read the following passage carefully and answer the questions given below it. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions. Long ago, a Brahmin called Haridatta lived in a little village. He was a farmer but the piece of land he cultivated provided him with so little to survive on that he was very poor. One day, unable to stand the heat of the summer sun, he went to rest for a whilevunder a big tree on his land. Before he could stretch out on the ground, he saw a huge black cobra slithering out of an anthill nearby. The snake then spread hisvhood and swayed gracefully from side to side. Haridatta was astonished tov seevthis and he thought, “This cobra must really be the god of this land. I have nevervseen or worshipped him before, which is probably why I am not able to get anything from the land. From this day onwards, I will worship him.” He hurried back to his home at once and returned with a glass full of milk. He poured it into a bowl and turning to the anthill said, “0 ruler of the land, I did not know you were living in this anthill. That is why I have not paid my tribute to you. Please accept my apologies for this omission and accept this humble offering.” He then placed the bowl of milk at the entrance of the anthill and left the place. The next day when the Brahmin arrived to work on his land before the sun rose, he found a gold coin in the bowl he had left at the anthill. He was very happy indeed and from that day on, he made it a practice to offer the cobra milk in a bowl each day. The next morning he would collect a gold coin and leave. One day Haridatta had to go to a neighbouring village on business. He asked his son to go to the anthill as usual and leave a bowl of milk for the cobra. The son did as he was told, but when he went to the same spot the next day and collected the gold coin he thought, “This anthill must be full of gold. If I kill the cobra, I can collect all the gold in an instant, instead of having to waste my time coming here every day.” He then struck the cobra with a big stick. The cobra deftly dodged the blow but bit Haridatta’s son with his poisonous fangs. The boy soon died. When Haridatta returned to his village the next day, he heard how his son had met his death. He realised at once that his son’s greed would probably have caused him to attack the cobra. The Brahmin went to the anthill the day after his son’s cremation and offered milk to the cobra as usual. This time, the cobra did not even come out of his hole. Instead, he called out to Haridatta, “You have come here for gold, forgetting That you have just lost a precious son and that you are in mourning. The reason for this is pure greed. From today, there is no meaning to our relationship. I am going to give you a diamond as a final gift. But please don’t ever come back again.” He slithered away as the Brahmin watched.Which of the following is TRUE according to the story ?
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MCQ-> Two traders, Chetan and Michael, were involved in the buying and selling Of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs 100, while at the end of the fifth day it was priced at Rs 110. At the end of each day, the MCS share price either went up by Rs 10, or else, it came down by Rs 10. Both Chetan and Michael took buying and selling decisions at the end of each trading day. The beginning price of MCS share on a given day was the same as the ending price of the previous day. Chetan and Michael started with the same number of shares and amount of cash, and had enough of both. Below are some additional facts about how Chetan and Michael traded over the five trading days.• Each day if the price went up, Chetan sold 10 shares of MCS at the closing price. On the other hand, each day if the price went down, he bought 10 shares at the closing price.• If on any day, the closing price was above Rs 110, then Michael sold 10 shares of MCS, while if it was below Rs 90, he bought 10 shares, all at the closing price.If Chetan sold 10 shares of MCS on three consecutive days, while Michael sold 10 shares only once during the five days, what was the price of MCS at the end of day 3?
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MCQ-> A difficult readjustment in the scientist's conception of duty is imperatively necessary. As Lord Adrain said in his address to the British Association, unless we are ready to give up some of our old loyalties, we may be forced into a fight which might end the human race. This matter of loyalty is the crux. Hitherto, in the East and in the West alike, most scientists, like most other people, have felt that loyalty to their own state is paramount. They have no longer a right to feel this. Loyalty to the human race must take its place. Everyone in the West will at once admit this as regards Soviet scientists. We are shocked that Kapitza who was Rutherford's favourite pupil, was willing when the Soviet government refused him permission to return to Cambridge, to place his scientific skill at the disposal of those who wished to spread communism by means of H-bombs. We do not so readily apprehend a similar failure of duty on our own side. I do not wish to be thought to suggest treachery, since that is only a transference of loyalty to another national state. I am suggesting a very different thing; that scientists the world over should join in enlightening mankind as to the perils of a great war and in devising methods for its prevention. I urge with all the emphasis at my disposal that this is the duty of scientists in East and West alike. It is a difficult duty, and one likely to entail penalties for those who perform it. But, after all, it is the labours of scientists which have caused the danger and on this account, if on no other, scientists must do everything in their power to save mankind from the madness which they have made possible. Science from the dawn of History, and probably longer, has been intimately associated with war. I imagine that when our ancestors descended from the trees they were victorious over the arboreal conservatives because flints were sharper than coconuts. To come to more recent times, Archimedes was respected for his scientific defense of Syracuse against the Romans; Leonardo obtained employment under the Duke of Milan because of his skill in fortification, though he did mention in a postscript that he could also paint a bit. Galileo similarly derived an income from the Grant Duke of Tuscany because of his skill in calculating the trajectories of projectiles. In the French Revolution, those scientists who were not guillotined devoted themselves to making new explosives. There is therefore no departure from tradition in the present day scientists manufacture of A-bombs and H-bomb. All that is new is the extent of their destructive skill.I do not think that men of science can cease to regard the disinterested pursuit of knowledge as their primary duty. It is true that new knowledge and new skills are sometimes harmful in their effects, but scientists cannot profitably take account of this fact since the effects are impossible to foresee. We cannot blame Columbus because the discovery of the Western Hemisphere spread throughout the Eastern Hemisphere an appallingly devastating plague. Nor can we blame James Watt for the Dust Bowl although if there had been no steam engines and no railways the West would not have been so carelessly or so quickly cultivated To see that knowledge is wisely used in primarily the duty of statesmen, not of science; but it is part of the duty of men of science to see that important knowledge is widely disseminated and is not falsified in the interests of this or that propaganda.Scientific knowledge has its dangers; but so has every great thing. And over and beyond the dangers with which it threatens the present, it opens up, as nothing else can, the vision of a possible happy world, a world without poverty, without war, with little illness. And what is perhaps more than all, when science has mastered the forces which mould human character, it will be able to produce populations in which few suffer from destructive fierceness and in which the great majority regard other people, not as competitors, to be feared, but as helpers in a common task. Science has only recently begun to apply itself to human beings except in their purely physical aspect. Such science as exists in psychology and anthropology has hardly begun to affect political behaviour or private ethics. The minds of men remain attuned to a world that is fast disappearing. The changes in our physical environment require, if they are to bring well being, correlative changes in our beliefs and habits. If we cannot effect these changes, we shall suffer the fate of the dinosaurs, who could not live on dry land.I think it is the duty of science. I do not say of every individual man of science, to study the means by which we can adapt ourselves to the new world. There are certain things that the world quite obviously needs; tentativeness, as opposed to dogmatism in our beliefs: an expectation of co-operation, rather than competition, in social relations, a lessening of envy and collective hatred These are things which education could produce without much difficulty. They are not things adequately sought in the education of the present day.It is progress in the human sciences that we must look to undo the evils which have resulted from a knowledge of the physical world hastily and superficially acquired by populations unconscious of the changes in themselves that the new knowledge has made imperative. The road to a happier world than any known in the past lies open before us if atavistic destructive passion can be kept in leash while the necessary adaptations are made. Fears are inevitable in our time, but hopes are equally rational and far more likely to bear good fruit. We must learn to think rather less of the dangers to be avoided than of the good that will be within our grasp if we believe in it and let it dominate our thoughts. Science, whatever unpleasant consequences it may have by the way, is in its very nature a liberator, a liberator of bondage to physical nature and, in time to come a liberator from the weight of destructive passion. We are on the threshold of utter disaster or unprecedented glorious achievement. No previous age has been fraught with problems so momentous and it is to science that we must look for happy issue.The duty of science, according to the author is :-
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MCQ-> India is rushing headlong toward economic success and modernisation, counting on high- tech industries such as information technology and biotechnology to propel the nation toprosperity. India’s recent announcement that it would no longer produce unlicensed inexpensive generic pharmaceuticals bowed to the realities of the World TradeOrganisation while at the same time challenging the domestic drug industry to compete with the multinational firms. Unfortunately, its weak higher education sector constitutes the Achilles’ Heel of this strategy. Its systematic disinvestment in higher education inrecent years has yielded neither world-class research nor very many highly trained scholars, scientists, or managers to sustain high-tech development. India’s main competitors especially China but also Singapore, Taiwan, and South Korea — are investing in large and differentiated higher education systems. They are providingaccess to large number of students at the bottom of the academic system while at the same time building some research-based universities that are able to compete with theworld’s best institutions. The recent London Times Higher Education Supplement ranking of the world’s top 200 universities included three in China, three in Hong Kong,three in South Korea, one in Taiwan, and one in India (an Indian Institute of Technology at number 41.— the specific campus was not specified). These countries are positioningthemselves for leadership in the knowledge-based economies of the coming era. There was a time when countries could achieve economic success with cheap labour andlow-tech manufacturing. Low wages still help, but contemporary large-scale development requires a sophisticated and at least partly knowledge-based economy.India has chosen that path, but will find a major stumbling block in its university system. India has significant advantages in the 21st century knowledge race. It has a large high ereducation sector — the third largest in the world in student numbers, after China andthe United States. It uses English as a primary language of higher education and research. It has a long academic tradition. Academic freedom is respected. There are asmall number of high quality institutions, departments, and centres that can form the basis of quality sector in higher education. The fact that the States, rather than the Central Government, exercise major responsibility for higher education creates a rather cumbersome structure, but the system allows for a variety of policies and approaches. Yet the weaknesses far outweigh the strengths. India educates approximately 10 per cent of its young people in higher education compared with more than half in the major industrialised countries and 15 per cent in China. Almost all of the world’s academic systems resemble a pyramid, with a small high quality tier at the top and a massive sector at the bottom. India has a tiny top tier. None of its universities occupies a solid position at the top. A few of the best universities have some excellent departments and centres, and there is a small number of outstanding undergraduate colleges. The University Grants Commission’s recent major support of five universities to build on their recognised strength is a step toward recognising a differentiated academic system and fostering excellence. At present, the world-class institutions are mainly limited to the Indian Institutes of Technology (IITs), the Indian Institutes of Management (IIMs) and perhaps a few others such as the All India Institute of Medical Sciences and the Tata Institute of Fundamental Research. These institutions, combined, enroll well under 1 percent of the student population. India’s colleges and universities, with just a few exceptions, have become large, under-funded, ungovernable institutions. At many of them, politics has intruded into campus life, influencing academic appointments and decisions across levels. Under-investment in libraries, information technology, laboratories, and classrooms makes it very difficult to provide top-quality instruction or engage in cutting-edge research.The rise in the number of part-time teachers and the freeze on new full-time appointments in many places have affected morale in the academic profession. The lackof accountability means that teaching and research performance is seldom measured. The system provides few incentives to perform. Bureaucratic inertia hampers change.Student unrest and occasional faculty agitation disrupt operations. Nevertheless, with a semblance of normality, faculty administrators are. able to provide teaching, coordinate examinations, and award degrees. Even the small top tier of higher education faces serious problems. Many IIT graduates,well trained in technology, have chosen not to contribute their skills to the burgeoning technology sector in India. Perhaps half leave the country immediately upon graduation to pursue advanced study abroad — and most do not return. A stunning 86 per cent of students in science and technology fields from India who obtain degrees in the United States do not return home immediately following their study. Another significant group, of about 30 per cent, decides to earn MBAs in India because local salaries are higher.—and are lost to science and technology.A corps of dedicated and able teachers work at the IlTs and IIMs, but the lure of jobs abroad and in the private sector make it increasingly difficult to lure the best and brightest to the academic profession.Few in India are thinking creatively about higher education. There is no field of higher education research. Those in government as well as academic leaders seem content to do the “same old thing.” Academic institutions and systems have become large and complex. They need good data, careful analysis, and creative ideas. In China, more than two-dozen higher education research centers, and several government agencies are involved in higher education policy.India has survived with an increasingly mediocre higher education system for decades.Now as India strives to compete in a globalized economy in areas that require highly trained professionals, the quality of higher education becomes increasingly important.India cannot build internationally recognized research-oriented universities overnight,but the country has the key elements in place to begin and sustain the process. India will need to create a dozen or more universities that can compete internationally to fully participate in the new world economy. Without these universities, India is destined to remain a scientific backwater.Which of the following ‘statement(s) is/are correct in the context of the given passage ? I. India has the third largest higher education sector in the world in student numbers. II. India is moving rapidly toward economic success and modernisation through high tech industries such as information technology and bitechonology to make the nation to prosperity. III. India’s systematic disinvestment in higher education in recent years has yielded world class research and many world class trained scholars, scientists to sustain high-tech development....
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