Reflect on the assumptions you made in the previous exercise: how can their validity be tested practically?
What will be an ideal response?
In principle, identifying assumptions provides an opportunity to test them in advance and may help
future understanding of why the world did not develop as expected. Some assumptions can be tested
via appropriate, empirical research (qualitative or quantitative), the use of game theory and other
kinds of analysis. The challenge, however, is to brief researchers with the ‘right’ questions. Other
assumptions over environmental issues are really no more than untestable ‘hunches’ propounded by
senior executives whose authority results in short-circuiting of more objective assessment (chapter
6). Nonetheless, especially in small adaptive enterprises, these judgements may actually be
preferable to the risk if expending too much time and money on research that ultimately produces
unreliable findings.
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A gain contingency that is reasonably possible and for which the amount can be reasonably estimated should be
A) accrued. B) disclosed but not accrued. C) neither accrued nor disclosed. D) classified as an appropriation of retained earnings.
What is the difference between a materials requisition and a purchase requisition?
FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh these benefits against the monetary cost of using FedEx along with other costs of using the service, they are acting upon ________
A) brand loyalty B) customer equity C) customer-perceived value D) customer lifetime value E) a societal marketing campaign
The first step for an auditor who concludes an illegal act exists is to:
A. Bring the matter to the attention of the SEC B. Assess the impact of the illegal act on the financial statements C. Bring the matter to the attention of the audit committee D. Assess the impact of the illegal act on the auditor's opinion