Exam 4: Ethics and Financial Reporting

In a short essay, list and discuss the three potential conflicts of interest that can take place during the auditing process.

In a short essay, list the six sets of industry factors that affect the industry based antecedents of fraud.

The ________________ refers to the level of diversity of the markets and customers, which must be addressed by the firm.

Earnings management is the purposeful intervention in the process of reporting income numbers with the objective of dampening the fluctuations of those numbers around their trend.

______________ is the purposeful intervention in the process of reporting income numbers with the objective of dampening the fluctuations of those numbers around their trend.

In a 2003 survey of 153 Boards of Directors, _________ considered that SOX had a postive impact on firms

Creative accounting can be defined as the deviation from the traditional methods used to interpret an accounting rule or standard.

The role of financial reporting is needed to provide information to investors and others with 3 out of the following objectives. Which is the odd one out?

_______________ is based on the belief that additional commitment is needed for a course of action even if this is not the correct course of action.

Corporate-level fraud refers to fraud which benefits the individual while occupational management fraud would focus on making materially misleading information pertaining to the financial status of the firm.

All of the following are heuristics that would bias the evaluation of the financial statements except

As an industry increases in concentration, the chance that collusion will take place in the industry also increases.

All of the following are criteria that revenues must meet according to the SEC Staff Accounting Bulletin No. 101 except

_____________ refers to the competitive environment of the industry.

Auditors are considered gatekeepers for the stakeholders.

Which is not one of the five philosophical prepositions of external financial reporting ?

Which of the following refers to the rate of speed and unpredictability of change within the industry?

As top level managers get older they are less likely to take risks and are not as concerned about short term gratification.

All of the following are principles on which the American Institute of Certified Public Accountants current code of conduct is based except

Off-balance sheet financing creates separate legal entities from the parent company.