The Accounting Scandals of the Early 2000s Led Many People

question 240

Multiple Choice

The accounting scandals of the early 2000s led many people to question the legitimacy of:

• A)Ratio analysis as a means of evaluating the performance of a firm.
• B)Relying on the recommendations of tax accountants to find ways of reducing the taxes owed by a business organization.
• C)Publishing financial information about a firm on the Internet.
• D)Allowing an accounting firm to do both consulting and auditing work for the same company.

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Definitions:

External Control

Influence or regulation by external factors or entities over an organization's or individual's actions and decisions.

Internal Control

Mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.