Question 1

An unusual aspect of the Green Mountain case is it included:

Accepted Answer

A)  Conference calls that provided earnings guidance to shareholders and analysts were used to mask a financial fraud 
B)  Desire to meet or beat analysts' earnings expectations led to manipulation of receivables balances 
C)  Company violated the Sarbanes-Oxley Act 
D)  PricewaterhouseCoopers knew about inflated inventory values 
A)  Conference calls that provided earnings guidance to shareholders and analysts were used to mask a financial fraud 
B)  Desire to meet or beat analysts' earnings expectations led to manipulation of receivables balances 
C)  Company violated the Sarbanes-Oxley Act 
D)  PricewaterhouseCoopers knew about inflated inventory values

Question 2

The Xerox case deals with accounting for multiple deliverables. Explain what this means in the context of the Xerox fraud.

Accepted Answer

The challenge of transactions with multi

Question 3

Inherent risk refers to:

Accepted Answer

A)  The possibility that a material misstatement will occur within the reporting company's accounting information system 
B)  The possibility that a material misstatement that has occurred will not be detected on a timely basis by the company's control system 
C)  The possibility that a material misstatement that has occurred will not be caught be the independent auditor's testing 
D)  The possibility that a material misstatement will occur in the financial statements 
A)  The possibility that a material misstatement will occur within the reporting company's accounting information system 
B)  The possibility that a material misstatement that has occurred will not be detected on a timely basis by the company's control system 
C)  The possibility that a material misstatement that has occurred will not be caught be the independent auditor's testing 
D)  The possibility that a material misstatement will occur in the financial statements

Question 4

Needles suggests that making judgments about what earnings management is becomes difficult because:

Accepted Answer

A)  It depends on management's intentions 
B)  There is no clear limit beyond which a choice is clearly unethical 
C)  A perfectly routine accounting estimate may be illegal and unethical 
D)  All of the above 
A)  It depends on management's intentions 
B)  There is no clear limit beyond which a choice is clearly unethical 
C)  A perfectly routine accounting estimate may be illegal and unethical 
D)  All of the above

Question 5

The best way to characterize the role of Sherron Watkins in the downfall of Enron is:

Accepted Answer

A)  She directed the internal auditors to examine numerous transactions that led to the discovery of the fraud 
B)  She gave in to the pressure of Andy Fastow to go along with materially misstated financial statements 
C)  She was sent to jail even though she cooperated with the government in its case against Enron 
D)  She tried to alert Ken Lay about the accounting scandal at Enron 
A)  She directed the internal auditors to examine numerous transactions that led to the discovery of the fraud 
B)  She gave in to the pressure of Andy Fastow to go along with materially misstated financial statements 
C)  She was sent to jail even though she cooperated with the government in its case against Enron 
D)  She tried to alert Ken Lay about the accounting scandal at Enron

Question 6

The Monsanto case centered around the:

Accepted Answer

A)  Acceleration of revenue due to channel stuffing arrangements 
B)  Use of cookie jar reserves to manage earnings 
C)  Improperly accounting for rebates 
D)  Use of non-GAAP EPS 
A)  Acceleration of revenue due to channel stuffing arrangements 
B)  Use of cookie jar reserves to manage earnings 
C)  Improperly accounting for rebates 
D)  Use of non-GAAP EPS

Question 7

In the Statement of Financial Accounting Concepts (SFAC) No. 8. SFAC No. 8 the position about materiality is that:

Accepted Answer

A)  It should always be determined only through qualitative evaluations 
B)  It should always be determined through quantitative evaluations 
C)  It should always be determined by considering whether the amount affects past financial statements 
D)  It should be determined by how the magnitude of the item would be viewed by a reasonable person 
A)  It should always be determined only through qualitative evaluations 
B)  It should always be determined through quantitative evaluations 
C)  It should always be determined by considering whether the amount affects past financial statements 
D)  It should be determined by how the magnitude of the item would be viewed by a reasonable person

Question 8

Which of the following authors(s) focus(es) on "management's intent to deceive the stakeholders by using accounting devices to positively influence reported earnings?"

Accepted Answer

A)  Dechow and Skinner 
B)  Healy and Wahlen 
C)  Schipper 
D)  Thomas E. McKee 
A)  Dechow and Skinner 
B)  Healy and Wahlen 
C)  Schipper 
D)  Thomas E. McKee

Question 9

Which of the following was not an accounting issue in the Sunbeam case?

Accepted Answer

A)  Cookie jar reserves 
B)  Channel stuffing 
C)  Bill and hold sales 
D)  Swap transactions 
A)  Cookie jar reserves 
B)  Channel stuffing 
C)  Bill and hold sales 
D)  Swap transactions

Question 10

Explain what is meant by "quality of earnings" including links to earnings management and audit committee responsibilities in evaluating the quality of earnings?

Accepted Answer

The terms "quality of earnings" and "ear

Question 11

Financial shenanigans involving recording revenue too soon includes all of the following except:

Accepted Answer

A)  Recording revenue when future services are still to be provided 
B)  Recording revenue before shipment of a product 
C)  Recording revenue after customer acceptance 
D)  Recording revenue when the customer is not obligated to pay 
A)  Recording revenue when future services are still to be provided 
B)  Recording revenue before shipment of a product 
C)  Recording revenue after customer acceptance 
D)  Recording revenue when the customer is not obligated to pay

An unusual aspect of the Green Mountain case is it included:

The Xerox case deals with accounting for multiple deliverables. Explain what this means in the context of the Xerox fraud.

Inherent risk refers to:

Needles suggests that making judgments about what earnings management is becomes difficult because:

The best way to characterize the role of Sherron Watkins in the downfall of Enron is:

The Monsanto case centered around the:

In the Statement of Financial Accounting Concepts (SFAC) No. 8. SFAC No. 8 the position about materiality is that:

Which of the following authors(s) focus(es) on "management's intent to deceive the stakeholders by using accounting devices to positively influence reported earnings?"

Which of the following was not an accounting issue in the Sunbeam case?

Explain what is meant by "quality of earnings" including links to earnings management and audit committee responsibilities in evaluating the quality of earnings?

Financial shenanigans involving recording revenue too soon includes all of the following except:

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Organizational Ethics and Corporate Governance

Ethics and Professional Judgment in Accounting

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Ethical Leadership and Decision-Making in Accounting

Filters

Exam 7: Earnings Management

An unusual aspect of the Green Mountain case is it included:

The Xerox case deals with accounting for multiple deliverables. Explain what this means in the context of the Xerox fraud.

Inherent risk refers to:

Needles suggests that making judgments about what earnings management is becomes difficult because:

The best way to characterize the role of Sherron Watkins in the downfall of Enron is:

The Monsanto case centered around the:

In the Statement of Financial Accounting Concepts (SFAC) No. 8. SFAC No. 8 the position about materiality is that:

Which of the following authors(s) focus(es) on "management's intent to deceive the stakeholders by using accounting devices to positively influence reported earnings?"

Which of the following was not an accounting issue in the Sunbeam case?

Explain what is meant by "quality of earnings" including links to earnings management and audit committee responsibilities in evaluating the quality of earnings?

Financial shenanigans involving recording revenue too soon includes all of the following except:

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Organizational Ethics and Corporate Governance

Ethics and Professional Judgment in Accounting

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Ethical Leadership and Decision-Making in Accounting

Filters