Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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What is one function of an executive committee?

To govern and administer the company's operations
To focus exclusively on marketing strategies
To act as a mediator between shareholders and employees
To conduct audits on financial statements

The correct answer is: To govern and administer the company's operations

The primary function of an executive committee is to govern and administer the company's operations. An executive committee typically consists of high-level executives and is responsible for making strategic decisions that impact the entire organization. This includes overseeing various aspects of the company's operations, aligning them with the overall strategy, and facilitating communication between different departments to ensure that goals are met efficiently. In contrast, while other functions can be part of a company's activities, they do not encapsulate the comprehensive role of an executive committee. For example, focusing exclusively on marketing strategies would limit the scope of the committee’s responsibilities, as it should address a wide range of operational issues. Similarly, acting as a mediator between shareholders and employees or conducting audits on financial statements are roles that might be handled by other specific committees or departments within the organization rather than the executive committee itself. The executive committee's broader governance role sets it apart as a crucial element in ensuring the overall strategic direction and effective management of a company.