Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What is a supranational body?

1. A domestic regulatory authority

2. An organization composed of international members

3. A company created under local laws

4. A local government entity

The correct answer is: An organization composed of international members

A supranational body is defined as an organization that transcends national boundaries and is composed of members from multiple countries. These organizations typically engage in activities that facilitate cooperation and collaboration on various international issues, such as trade, security, and environmental standards. By definition, a supranational body often has the authority to make decisions that member countries agree to follow, sometimes even overriding national laws and regulations. Examples include the European Union and the World Trade Organization, where the collective interests of the member states are considered above individual country interests. The other choices refer to entities that operate at a national or local level. A domestic regulatory authority functions within a single country's jurisdiction, and a local government entity operates at a community or municipal level. Additionally, a company created under local laws operates specifically within the legal framework of one nation and does not encompass the broad, cross-border collaboration that characterizes supranational organizations.