Examining a company's relationships with other individuals and entities can reveal important information about financial statement fraud. Identify the piece of information that is correctly linked to its source
a. Examining relationships with financial institutions will show whether there has been significant "short selling" of the company's stock.
b. Examining relationships with related parties will show whether there are unusual transactions that significantly improve the company's reported financial performance.
c. Examining a company's relationships with its lawyers will show whether management is able to unduly influence the selection of accounting principles and the determination of significant estimates.
d. Examining relationships with regulatory bodies will show whether the company has recently changed legal counsel.
b
FEEDBACK: a. Incorrect. This information would come from examining a company's relationships with its investors.
b. Correct.
c. Incorrect. This information would be revealed by examining the scope of influence of management and the board of directors and not by examining a company's relationships with its lawyers.
d. Incorrect. This information comes from investigating a company's relationship with its lawyers.
You might also like to view...
Peter, the owner and lead accountant at a tax preparation firm, is changing the work schedule of his long-term employees for the months of March and April, the company's busiest time. He is requiring work on weekends for everyone, using the same basic schedule as last year. Peter should expect that his employees will be
A. terribly upset and quit. B. terribly upset but not quit. C. moderately upset and complain. D. moderately upset but not complain. E. hardly upset or not upset at all.
If someone feels empowered enough to see that his or her actions can make a real difference in an organization, they are feeling which psychological empowerment belief?
a. Meaningfulness b. Self-determination c. Competence d. Impact
When determining the right bargaining structure for a given set of negotiations, labor and management negotiators face a tradeoff between:
A. Equity and efficiency B. Responsiveness and employee voice C. Power and political influence D. Power and responsiveness to local needs
A project manager needs the work breakdown structure and a time-phased project budget to establish the project baseline
Indicate whether the statement is true or false