Explain the difference in the treatment of principal received for a self-liquidating trust and a revolving trust
What will be an ideal response?
Typically when amortizing assets are securitized, the collateral is fixed over the life of the structure. That is, no new assets are acquired. The collateral composition stays the same except for prepayments and defaults. Consequently, all principal received by the trust is paid out to the bond classes. The structure in this case is referred to as a self-liquidating structure.
In the case of nonamortizing assets, for a period of time, referred to as the lockout period or revolving period, all principal received is used to purchase new collateral. Hence, new assets are being added to the collateral, and this structure is referred to as a revolving structure. After the lockout period, called the amortization period, principal received is distributed to the bond classes.
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How must an auditor address fraud in the planning stage?
a. The auditor must test for fraud in the planning stage by sampling accounts. b. The auditor must consider the likelihood of fraud existing in the company in the planning stage. c. The auditor must realize that most people are honest and not automatically assume that fraud exists when planning the audit. d. The auditor must not be aggressive in its initial approach to fraud as trust may be lost by the client.
Explain the concepts of eco-efficiency, biomimicry, and cradle-to-cradle responsibility.
What will be an ideal response?
For 18 months, Warner-Lambert Co. was required to include the following statement in all television advertisements for Listerine: "Listerine will not help prevent colds or sore throats or lessen their severity." The Federal Trade Commission (FTC) imposed this requirement because previous advertising had caused consumers to believe Listerine was effective against colds. This is an example of the FTC action known as
A. self-regulation. B. cease-and-desist advertising. C. deceptive advertising. D. unethical advertising. E. corrective advertising.
Managers practicing __________ view the cost of compliance as a(n) __________
a. value-based compliance management, investment rather than an expense b. strategic compliance management, investment rather than an expense c. resource-based management, expense rather than an investment d. strategic-based risk management, investment rather than an expense