Which of the Following Acts by Management Could Discourage Someone

question 41

Multiple Choice

Which of the following acts by management could discourage someone from reporting an observed act of fraud?

• A) Providing clear instructions of who to contact
• B) Providing assurance of anonymity
• C) Providing clear instructions on how to convey the information
• D) Providing a clear list of possible consequences

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Definitions:

Cost of Equity

The return a firm theoretically pays to its equity investors to compensate for the risk they undertake by investing in the company.

Cost of Debt Financing

The total expenses a company incurs in order to borrow money, including interest payments, transaction fees, and any other associated costs.

Business Risk

The exposure to factors that can lead to a reduction in the value of an investment or in the revenues of a business.

Systematic Risk

A risk that influences a large number of assets. Also called market risk.